I 




JOHN SHERMAN; 

WHAT HE HAS SAID AND DONE, 

BEING A HISTORY OF THE ( 

LIFE AND PUBLIC SERVICES 

OF THE 

HON. JOHN SHERMAN, 

Secretary of the Treasury of the United States. 

by THE 

EEV. S. A. BRONSON, D.D. 



*t&*m*y 



Columbus, O. : 

H. W. DERBY & CO., Publishers, 

1880. 



Eg 



Copyright, 1880, H. W. Derby & Co. 



ELECTROTYPED AT 

FRANKLIN TYPE FOUNDRY, 

CINCINNATI. 



CONTESTS. 







PAGE 


Introduction, 


5-14 


CHAP 






I. 


The Sherman Family, .... 


15-26 


II. 


Personal History, 


27-61 


III. 


The Guild, Mr. Sherman's Specialty, 


62-70 


IV. 


Election to Congress, .... 


71-87 


V. 


XXXV th Congress, ..... 


88-104 


VI. 


XXXVIth Congress — First Session, 


105-119 


VII. 


XXXVIth Congress — Second Session, 


120-130 


vii r. 


In the Senate, 


131-146 


IX. 


Resumption Contemplated, 


147-154 


X. 


Preparing for Resumption, 


155-165 


XI. 


Revenues and Expenses, .... 


166-178 


XII. 


The Panic of 1873, 


179-190 


XIII. 


The Resumption Act, .... 


191-202 


XIV. 


Coinage, 


203-209 


XV. 


Efforts at Repeal Answered, . . . . 


210-217 


XVI. 


Alleged Discrepancies, .... 


218-228 


XVII. 


New York Custom House, . 


229-238 


XVIII. 


Portland Speech, 


239-268 




Conclusion, 

C 


269-272 

iii) 



INTEODUOTIOK 



The following sketch lias been prepared, not at Mr. 
Sherman's request, nor that of his friends, but by his con- 
sent, with the caution that there should be no exagger- 
ation. It was his evident wish to be presented to those 
who know him not, just as he appears to those who do 
know him. All that relates to the Sherman family and 
ancestry has been gathered from authentic historians of 
Connecticut. The facts of his private personal history 
have been gathered from the writer's own knowledge, and 
from that of Mr. Sherman's sister, and his neighbors, cor- 
rected by himself. 

It is intended by the writer to make this narrative a 
plain, simple, common-place statement of the leading and 
characteristic facts of Mr. Sherman's life; to cover up 
nothing that would tell against him, and exaggerate noth- 
ing in his favor. It is firmly believed that whoever reads 
this sketch, and afterwards makes his acquaintance, will 
find Mr. Sherman the same straightforward, earnest, la- 
borious servant of the public that he is here represented 
to be. 

This book is meant to be, not an argument to support 
a candidate for the Presidency, but such a statement of 
what Mr. Sherman has said and done as shall enable an 
intelligent public to judge whether or not the subject of it 

worthily deserves to be President. 

(v) 



vi INTRODUCTION. 

Lest, however, some may take up this little volume that 
have not the leisure nor the taste to wade through the 
ponderous deeds and solid speeches here so briefly stated, 
nor the time and thought needed to appreciate the efforts 
by which so mighty a work has been achieved, the writer 
will present a brief digest of the facts and the reasons for 
presenting them. 

The writing and publishing of a sketch of Mr. Sher- 
man's life at this time will necessarily be regarded as an 
attempt to pave his way to the Presidency. The publi- 
cation of it may mean that; but in the whole sketch, as 
it now appears, that thought was very little in the writer's 
mind. It is his conviction that resumption has made Mr, 
Sherman a greater man than the Presidency ever can. 
As the capture of Vicksburg, the surrender of Lee, and 
squelching the rebellion has made General Grant greater 
than President Grant, so resumption and the victory over 
the frauds in the Xew York Custom House have proved 
Mr. Sherman a greater man than the Presidency ever can. 

Still multitudes in this land will put the question to this 
narrative, drawn up by his friend, whether John Sherman 
is a suitable man for the Presidency of the United States. 
Let us consider — 

I. What qualities are required in a President? 

II. Whether Mr. Sherman is possessed of those qualifi- 
cations. 

I. The qualities required in a President are: 
1st. He should be a man that can manage well his own 
business. To do this requires that one should govern 
himself. An impulsive, heedless man may, by some sud- 
den strike, amass great wealth, but by a move equally 
sudden he may lose it all. With such a man it would 
never be safe to intrust the government of a nation. 



INTRODUCTION. vii 

2d. To be eminently successful he "must be temperate 
in all things." Neither "a gluttonous man nor a wine- 
bibber" can safely and judiciously conduct his own affairs. 
No man can excessively indulge his appetites without im- 
pairing his judgment. There may be a time when the 
duties of the Presidency will require the most nicely bal- 
anced exercise of the judgment; and excessive indulgence 
may be attended with the most terrific consequences. 
With a well-balanced judgment, Louis Napoleon would 
hardly have commenced war with Germany when he did. 
There are times, in the midst of popular excitement, when 
great coolness and deliberation are required, Such times 
are by no means rare, and a man with a cool, calculating 
head, a man of nerve and firmness, a man that fears noth- 
ing but wrong-doing, may be worth vastly more to the 
nation than one with the opposite qualities. 

3d. We need a man for President who, by his training 
and culture, will sustain the dignity of the office, and 
command the respect of the nation, as well as that of the 
representatives of foreign nations. The success of the 
present administration is doubtless very much attributable 
to the dignity and unsullied purity of the executive man- 
sion. 

4th. We need a man extensively educated, at least prac- 
tically, in the science of government; and one that under- 
stands not only our own government, its constitution and 
laws, but those of other nations with which we come in 
contact. 

5th. We need a man who has ideas and opinions of his 
own, and has courage to 'express them. A man may have 
the best thoughts, and form the best and wisest plans, but 
if he be too timid to express them till he learns whether 
they will be accepted, they will come too late from one 



viii INTRODUCTION 

who is appointed leader. He must be learned in the art 
of governing sufficiently to know the best plans and 
measures, honest enough to adopt them, and have firmness 
enough to carry them through in opposition to his most 
devoted friends. 

6th. To make the best kind of a President, he must 
have forecast or prescience enough to suggest and urge the 
adoption of plans that are needed to take effect, often years 
in advance. One that occupies a position sufficiently ele- 
vated to look so far ahead, may have much to contend 
with. He may seem to those around like a dreamer, a 
visionary enthusiast, and have hard battles to fight with 
his friends. It may require much patience, cool reason- 
ings, curbing the temper under provocation, and long 
waiting. 

7th. It is desirable that the President of the United 
States should be a man of some' magnetic power over the 
minds and wills of men. This may be of two different 
kinds. One may be a genial, whole-souled man, taking 
the people right to his heart. This is the most pleasing 
form, and on some occasions, and for some emergencies, 
may be the best. The other is of a commanding, energetic 
power of will. This is a force that carries the mightiest 
sway, and doubtless was the secret of Napoleon's power. 
We do not read that he was much given to ''shaking 
hands," that he was on familiar terms with those about 
him, that he was "hale fellow well met" with any body. 
His real force lay in the unbending majesty of his will, and 
a mystic power of making other wills succumb to his. 

8th. We need a man that is unquestionably loyal to a 
republican form of government. 

9th. We need a man that has been long enough before 
the public to let us know, not only that he professes all 



INTRODUCTION. ix 

these things, or that his friends claim them for him, but to 
test him in trying circumstances, and learn whether these 
good qualities are genuine or shams, 

II. Does Mr. Sherman possess the qualities here pre- 
scribed ? A survey of this sketch it is believed will give a 
decided affirmative answer. 

1st. As to the management of affairs. During all his 
course, from the very commencement of his business life, 
his maxim has been always to keep his expenses within his 
income. Because he is comfortably provided for; some 
have hinted (but no responsible charge was ever made to 
that effect) that he has used his position to accumulate 
wealth. No instance of any improper use of his position 
for any such purpose has been or can be named. A young 
lawyer that could lay aside a thousand dollars a year, from 
the age of twenty-one, can be trusted to manage the affairs 
of the nation. Mr. Sherman has made many investments, 
and the writer can not learn that he ever made an unsuc- 
cessful one, except that the winter froze in his boat and 
cargo in the Muskingum Kiver, when he was sixteen years 
old. Certainly it will be safe to intrust the government 
in the hands of one so successful in conducting his own 
interests. 

2d. As to appetite, whether eating or drinking, sleeping 
or waking, business or amusement, no man ever controlled 
himself more perfectly than Secretary Sherman. When 
on the point of being mobbed at Toledo he entirely dis- 
armed the infuriate masses by his very coolness and calm- 
ness. The public may be assured that no emergency in the 
government will arise to disconcert him. This self-control 
is, in part, the secret of his control over others. 

3d. Does Secretary Sherman possess the kind and the 



a INTRODUCTION. 

degree of culture required for the office of President of the 
United States? 

The main elements of the highest culture may be classed 
under three heads: 

1. Heredity. 

2. Education. 

3. Personal energy and talent. 

1st. Hereditary culture or blood is of no small account in 
fitting a man for a commanding position in society. Here 
we may be met by the fact that the lamented Lincoln was 
of humble origin, and came up by his own efforts from 
obscurity. !S T o doubt his parents were poor, and he was 
thus deprived of many of the advantages of an early edu- 
cation. But the strong probability is that Lincoln in- 
herited a long line of ancestral culture of the choicest kind, 
Heredity often dips into the ground and disappears, for 
sometimes two or three generations. We know not what 
Lincoln's father might have been had he not been cut off 
by the Indians, nor what was the wealth and culture of his 
grandfather in Virginia, nor of his Quaker great-grand- 
father in Pennsylvania ; but there is little doubt that he 
was a Lincoln, of Lincolnshire, in England, and that he 
was heir to the choicest culture of any in that shire. It 
may have been remote, but not too remote to appear in the 
noblest specimen of manhood that America has produced. 
In this respect Lincoln may have had the advantage of our 
Secretary. Mr. Sherman's ancestry is traceable not to any 
rank of nobility except merit, and to the solid, libertv- 
loving yoemanry of the county of Suffolk. Being trans- 
ferred to this country, the family never ceased (as will 
appear in this narrative) to hold a leading position in the 
counsels of town, state, and the nation. The term Honor- 
able has been prefixed to some geven generations of Sher- 



INTRODUCTION. xi 

mans, not by prescription, but by merit among his peers; 
and when the Stoddard blood, inheriting some of the in- 
tellect of Jonathan Edwards, came to mingle with the 
Shermans, it certainly tells admirably in favor of the 
hereditary culture of the Honorable John Sherman. 

2d. In education, as will be seen, Mr. Sherman's ad- 
vantages w r ere upon a par with most of the statesmen that 
grew up with him, having been drilled by the best teachers 
of the time, when it was the custom to study out lessons 
and not ride ponies. 

3d. As to native talent and personal energy, this narra- 
tive will show that Mr. Sherman has scarcely an equal, 
and no superior. He has been tried as Roger Sherman 
was, and as Lincoln was. His father died and left him 
poor, his only inheritance being an untarnished name. 

There is a species of art, now somewhat in vogue, 
called repousse, in which the force that produces the raised 
figures on the outside is exerted from within. This is pre- 
cisely the force that has produced such characters as Roger 
Sherman, Abraham Lincoln, Wilson, Garfield, and John 
Sherman. Witness the latter sent to make his way with 
strangers, at eight years of age, and for years of his early 
youth following the surveyor's chain, his courage in defend- 
ing the temperance lecturer, and, when business was slack, 
loading a barge for Cincinnati. As he began life depend- 
ing on himself, so he continued, as this whole narrative 
will show. The industry and success of the man in the 
acquisition of knowledge are only equaled by his practical 
good sense in applying it. 

4th. Not only in regard to culture, but in respect to the 
knowledge acquired and retained, — knowledge of the finances 
of all nations, revenue systems, coinage, diplomacy, inter- 
national law, etc., Mr. Sherman is never taken aback. 



xii INTRODUCTION. 

He has always made it a point to be ready on every meas- 
ure presented for action, and never to speak nor act in the 
dark. 

5th, As respects having opinions of his own, and cour- 
age to express them, the question never has been asked. 
Opinions is not the word. -The true expression is convic- 
tions, and they are strong, and his expression of them bold. 
When a candidate for Congress the first time, a young 
man as he was, he was asked in a neighborhood of aboli- 
tionists if he would vote for the abolition of slavery in the 
District of Columbia, he said plainly, No, though he knew 
it might jeopardize his election. When shown the alleged 
Weber letter, he was asked if he wrote it. At first he 
slightly hesitated, because it began as though he might 
possibly have written it, and such is the unflinching cour- 
age of the man, that had he written it he could not have 
disowned it. Many instances confirmatory of this trait 
will appear in the following sketch. The country may be 
assured that whatever measure Mr. Sherman thinks best 
will be favored by him, whether it be avowed by Demo- 
crats or Republicans. The present National Bank system, 
engineered by him through Congress, is almost identical 
with that suggested by President Buchanan in 1857. 

6th. As respects Mr. Sherman's forecast or prescience, 
nothing more is needed to satisfy us than the brief history 
of resumption here sketched, and the quotations made from 
his speeches on that subject. An instance showing this 
came under the writer's own knowledge. Some months 
before the late Presidential nomination was made he asked 
Mr. Sherman, then Senator, who would probably be the 
nominee? Without hesitation, he said probably Governor 
Hayes. It is quite evident that if Mr. Sherman allows 
himself to be nominated he will be elected. 



INTRODUCTION, 



7th. In magic power of will, Mr. Sherman may almost 
be said to rival General Jackson, and in some respects to 
surpass him. The following was Mr. Corwin's opinion of 
Jackson. Mr. • Corwin was Secretary of the Treasury 
when the General died. A man came into the office one 
day, and asked him if he thought General Jackson was in 
heaven. " I presume he is," said he. " But why do you 
think so?" "Because," said he, "the General would 
always have his way." So Mr. Sherman will have his 
way/ Not by taking the " responsibility" and forcing it, 
but by patiently waiting to accomplish it in a course of 
obedience to law. Mr. Sherman's whole course in Con- 
gress showed his strong faith, that when the people of this 
country understand what is right and best, sooner or later 
they will do it. His prescience or foresight has commonly, 
long beforehand, enabled him to see what was best, his 
courage led him to urge it, however unpopular, and his 
patience was such that he could wait for his resources of 
reason and fact to bring it about. Mr. Sherman is not so 
stubborn as to kick against the people uninstructed, but 
will stand and wait till they understand him. In his last 
report he has recommended the taking away the legal 
tender quality of the Greenbacks, not as a political or 
party move, but because he thought it lawful and right 
and prudent as a measure, and is willing now to wait till 
the people realize it. 

8th. In respect of loyalty there can be no question. If 
the devotion of the family for two hundred and forty years 
to the interests of this nation, through King Philip's War, 
the War of the Revolution, of 1812, and his personal efforts 
in mustering the Sherman Brigade, and the offer to resign 
his senatorial honors and enter the army, do not prove his 
loyalty, nothing can. 



xiv INTRODUCTION. 

9th. Mr. Sherman has been long enough in public life 
to become acquainted with his business — long enough for 
the people to know exactly what he is and how he will 
conduct the Government if the reins are put in his 
hands. For twenty-four years he has been in office, and 
been a bold and fearless leader, and in all that time his 
bitterest foes — and he has had many — have never been able 
to throw any mud and make it stick. In times like these 
for a man to walk the tight-rope of American politics in 
sight of the whole people, for so many years, and never 
stumble nor trip, demonstrates that he can be safely trusted 
with the reins of Government for at least four years. 

But safety is not all. If John Sherman is made Presi- 
dent, the nation may rest assured that the White House 
will be occupied by no starched-up, high-feeling aristocrat, 
but by a party who will be ready to treat all alike, with 
due consideration and respect, and there will be hearts to 
sympathize with the humblest sufferer. Xo man, it is 
said, has ever administered the Treasury with more cour- 
tesy and affability and kindness to those tinder him than 
John Sherman. A man who thus makes himself agree- 
able to twelve thousand employes under him, may reason- 
ably be expected to do so to the whole nation if it shall 
come under his administrative care. 



HOR JOHN SHERMAN. 



CHAPTER I. 

THE SHERMAN FAMILY. 



There may be many advantages arising from an ances- 
try distinguished by merit, or eminent moral and intellect- 
ual attainments. It is a well-established maxim that 
" blood will tell." Heredity is always regarded as impor- 
tant, and, in truth, great stress is universally laid upon 
it. Traits of character, tastes, dispositions, habits, culture, 
mental and physical, that are strongly marked in one gen- 
eration are likely to leave their impress upon the next, and 
often reappear with even greater distinctness in the third 
and fourth generation. This truth should be strongly im- 
pressed upon the mind of every head of a family, that all 
he is, for good or for evil, may reappear in, and exert its 
force upon, the third or fourth generation. 

A brief review of the history of the Sherman family 
may afford some indication of the source of that self-gov- 
erning power of will, that has guided the Honorable Secre- 
tary so securely for twenty-four years of public life, in the 
stormiest period of this Republic, and carried him on, in 
spite of the strongest opposition of both friend and foe, to 
an achievement that has given him" a world-wide fame. 

"The name of Sherman is by no means a common one 

(15) 



16 HON. JOHN SHERMAN. [chap. 

in England," says Hollister in liis History of Connecticut, 
"though it has been highly respected and honored." Sir 
Henry Sherman was one of the executors of the will of 
Lord Stanley, Earl of Derby, County of Lancaster, dated 
23d of May, 1521. William Sherman purchased Knight- 
ston in the time of Henry YIIL A monument to William 
Sherman is in Ottery, St. Mary, 1542. John Sherman 
and his son both died in the same place in 1617. "The 
Shermans of Laxley, (from Davy's manuscript collections 
relating to the county of Suffolk (England), deposited in 
the British Museum),— Thomas Sherman (1st), of Laxley; 
2. Thomas Sherman (2d), of Laxley; 3. Thomas Sher- 
man (3d), gentleman, of Laxley and Stutson, afterwards 
of Ipswich; 4. John Sherman, son of Thomas Sherman 
(2d) ; 5. William Sherman, eldest son of John, married 
Mary Lascelles, of Nottinghamshire. He was aged thirty- 
one years in 1619. His son John came to America in 
1634, and settled in Watertown, Massachusetts, near his 
cousin of the same name, from whom he is distinguished 
in history as Captain John Sherman." This Captain John 
Sherman was the ancestor of Roger Sherman, the signer 
of the Declaration of Independence. Of him Hollister 
speaks (vol. ii, p. 438) as follows: * 

"Sherman (Roger) was of a grave and massive under- 
derstanding ; a man who looked at the most difficult ques- 
tions, and untied their tangled knots, without having his 
vision dimmed, or his head made dizzy. He appears to 
have known the science of government, and the relations 
of society from his childhood, and to have needed no teach- 

* It is quoted here because there seems to be so great a sem- 
blance between the character, moral and intellectual, of Roger 
Sherman, as drawn lure by the historian, and that of our present 
Secretary of the Treasury. 



I.] THE SHERMAN FAMILY. 17 

ing, because he saw moral, ethical and poetical truths in 
all their relations, better than they could be imparted to 
him by others. He took for granted, as self-evident, the 
maxims that had made Plato prematurely old, and had 
consumed the best hours of Bacon and Sir Thomas More, 
in attempting to elaborate and reconcile the inconsistencies 
of the British Constitution. 

1 ' With more well-digested thoughts to communicate than 
any other member of the Convention," (to adopt the Con- 
stitution of the United States), "he used fewer words to 
express his sentiments than any of his compeers. His 
views, uttered in a plain, though didactic form, seemed to 
be so presented, in a course of reasoning, as to be an em- 
bodiment of reason itself. 

" With a broad-based consciousness, extended as the line 
of the horizon, where calm philosophy and wild theory 
meet and seem to run into each other, he saw at a glance 
the most abstruse subjects presented to his consideration, 
and fused them down, as if by the heat of a furnace, into 
globes of solid maxims, and demonstrable propositions. 
Nor did he look merely at the present hour, but with a 
sympathy as lively as his ken was far-reaching, he pene- 
trated the curtains that hid future generations from the 
sight of common men, and made as careful provision for 
the unborn millions of his countrymen, as for the genera- 
tion that was then upon the stage of life. 

"These traits of character belonged to the Shermans by 
the double tenure of inheritance and the endowments of 
nature. He was descended from the Shermans of Laxley, 
in the County of Suffolk, England, as well as from the 
Wallers, the Laxleys, and other families in the maternal 
line, belonging to the solid landed gentry, who had helped 
to frame the British Constitution. Three members of the 



18 HON. JOHN SHERMAN. [chap, 

Sherman family emigrated to America in 1634. Two of 
them, Samuel Sherman" (the ancestor of Secretary Sher- 
man), "who soon removed to the valley of the Connecticut, 
and was one of the strongest pillars of the colony ; and the 
Rev. John Sherman, who was famous throughout New 
England as the best mathematician and astronomer in the 
colony, and one of the most eloquent preachers of that day, 
were brothers, and are not unknown to fame." 

The mental characteristics of Secretary Sherman, being 
so like s those of Roger Sherman, as it is believed these 
pages ^will render apparent, it will be of interest to 
witness the like schools in which both have been 
trained. 

Roger Sherman was a grandson of Captain John Sher- 
man, first cousin of the above, and inherited the best traits 
of the family. "But good lineage and intellectual powers 
of a high order, were not adequate of themselves to form 
such a character as Sherman's. It was to be tried in the 
school of poverty, and to buffet the waves of adversity, lie- 
fore it could gain nerve and strength enough to baffle the 
sophistries of the British ministry, defy the sword of a 
tyrant, or successfully oppose itself to the headlong flood 
of popular passion." — (Hollister's Hist. Conn., vol. ii, p. 
439.) 

The first mention made of that branch of the Sherman 
family from which our Secretary of the Treasury is de- 
scended, by Cothren, in his History of Ancient Woodbury, is 
in the following words: 

"The court grants Mr. Samuel Sherman, Lieutenant 
Wm. Curtice, Ensign Joseph Judson, and John Minor, 
themselves and associates, liberty to erect a plantation at 
Pomperouge; provided it doth not prejudice any former 
grant to any other plantation or particular person ; pro- 



L] THE SHERMAN FAMILY. 1!) 

vided any other honest inhabitants of Stratford have lib- 
erty to joyne with them in setleing there, and that they en- 
terteine so many inhabitants as the place will conveniently 
enterteine, and that they setle there within the space of 
three years." 

" In October, 1G75, Wm. Curtiss was appointed by the 
General Court captain of sixty men, to be raised in Fair- 
field County, to serve in King Philip's war, with power to 
appoint his inferior officers. In May, 1676, when the peo- 
ple of Woodbury were at Stratford, on account of this war, 
he and Mr. Samuel Sherman were appointed Commission- 
ers for Stratford and Woodbury. Intimately associated 
with Captain Curtiss in all that related to the welfare of 
the new town, was the Hon. Samuel Sherman. He was, 
at the date of its settlement, undoubtedly the most distin- 
guished man connected with the enterprise. He was from 
Dedham, Essex County, England. He came to this conn- 
try in 1634, and, previous to the date of the new planta- 
tion, had been a leading man in the colony. He had 
assisted in the settlement of several other towns in the 
colony, and now undertook the same for Woodbury." 
(History of Woodbury, vol. i, pp. 60, 61.) He died pre- 
vious to 1684, our Secretary being the seventh in the 
line of direct descent from him. His son, the Hon. 
John Sherman, was one of the first company (in the settle- 
ment of Woodbury), and his fame is more particularly the 
property of the town than the others. He was distin- 
guished not only in the town, but also in the colony. He 
was a justice of the quorum, or Associate County Court 
Judge, for forty-four years, from 1684, a representative of the 
town seventeen sessions, and Speaker of the Lower House 
in May and October, 1711, and in May and October, 1712. 
He was Town Clerk twenty-five years, and first Judge of 



20 HON. JOHN SHERMAN. [chap. 

Probate for the district of Woodbury from its organization, 
1719, for nine years." 

To show that our Shermans inherit something besides 
Sherman blood, a word or two may be recorded of the Rev. 
Anthony Stoddard, who is an ancestor of our Ohio Sher- 
mans. Says Cothren, vol. i, p. 79 : 

" During the continuance of this" (French and Indian) 
" war, it is related that one Sabbath evening, after the 
conclusion of the services at church, while the Rev. Mr. 
Stoddard was walking in his garden, near the Cranberry 
Pond, he discovered an Indian skulking among the sur- 
rounding trees and bushes. Apparently without noticing 
the movements of the Indian, he contrived to re-enter his 
house and obtain his gun. After playing the same game 
of skulking with his adversary for awhile, Mr. Stoddard 
got a fair view of him, discharged his piece, and he fell 
among the bushes. He dared not investigate further that 
night, but, having quietly given the alarm, the inhab- 
itants sought their palisaded houses for the night. Early 
in the morning he discovered another red foe in the vicin- 
ity of his companion, whom he also laid low with his 
musket." 

On November 17, 1774, it appears that a town meeting 
was held, of which Daniel Sherman, the great grandfather 
of the Ohio Shermans, was moderator, to take into consid- 
eration measures for carrying into effect the ''Resolves of 
the late General Congress," and of the House of Rep- 
resentatives of Connecticut, one of which was to have no 
dealings with the "foes to ye Rights of British America." 

"At a legal meeting of the freemen of the town of 
Woodbury, September the 19th, 177"), Gideon Stoddard 
and Daniel Sherman were put at the head of a 'Commit- 
tee of Inspection,' numbering thirty, who held their office 



L ] THE SHERMAN FAMILY. 21 

during the war of the Revolution. In the year 1781, Gen- 
eral Lafayette, with his chief officers, lodged at the house 
of Daniel Sherman. They were on their way to join Gen- 
eral Washington in his operations against Cornwallis." 

"At a legal meeting of the inhabitants of the town of 
Woodbury, April 3, 1777, Daniel Sherman, Esq., was 
chosen moderator. Voted that the selectmen in this 
town, for the time being, be a committee, as is speci- 
fied in the Resolve issued by his honor the Governor and 
Committee of Safety, dated March the 18th, 1777, to take 
care of such soldiers' Famelys as shall Inlist into the Conti- 
nental army." 

"It will be seen that this order was given by the Gov- 
ernor, with the advice and consent of the ' Council of 
Safety.' This council was appointed annually by the 
Assembly, and was composed of from nine to fourteen of 
the most distinguished men in the State, whose duty it was to 
assist the Governor when the Assembly was not in session." 

In cases where necessity and safety required immediate 
action, or on small matters, the Governor, at his discretion, 
was authorized to convene a part of said council, not less 
than five, to act with him. The per diem allowance to 
each of the council for this service, including their ex- 
penses, was settled at eight shillings. Woodbury was for 
four years, from May, 1777, represented in this council by 
Daniel Sherman. Another member of the council was 
Roger Sherman. 

" Daniel Sherman was perhaps the most distinguished 
man that had arisen in the town to his day," says Cothren, 
vol. i, p. 190. "He was a descendant of Samuel Sher- 
man, of Stratford, was a justice of the quorum for twen- 
ty-five years, and Judge of the Litchfield County Court 
five years, from 1786. For sixteen years he was Probate 



22 HON. JOHN SHERMAN. [chap. 

Clerk for the district of Woodbury, and judge of that dis- 
trict thirty-seven years. He represented his native town 
in the General Assembly sixty-five sessions. This was by 
far the longest period of time any one has ever represented 
the town. He was of commanding powers of mind, of 
sterling integrity, and every way qualified for the various 
public trusts confided to his care. His son, Taylor Sher- 
man, the fifth from Samuel, was married, in 1787, to Eliz- 
abeth Stoddard, the great grand-daughter of the parson 
who shot one Indian after church on Sunday and another 
before breakfast the next morning. He lived and died as 
a lawyer and a judge in Norwalk, Connecticut. He was 
one of those who went West to arrange a treaty with the 
Indians in 1808, and the same year came to Ohio again to 
make a partition of the Firelands. He died in May, 1815, 
and his widow came to Ohio, and died in Mansfield, 
in 1848." 

As the Shermans have been more or less interlaced with 
the Stoddards from very early times in the history of 
Woodbury, and as some of the marked characteristics 
of Secretary Sherman seem to have been derived from 
that source, it will be proper to give something of a sketch 
of that remarkable family. Anthony Stoddard emigrated 
from the west of England, and came to Boston about 1039. 
He married first, Mary, daughter of Hon. Samuel Down- 
ing, of Salem, and sister of Sir George, afterward Lord 
George Downing. Solomon, one of his sons, graduated 
at Harvard in 1662, and settled as minister at Northamp- 
ton,. Massachusetts, 1672. Anthony, a son of the latter, 
graduated at Harvard, 1697, and settled at Woodbury, 
and for his first wife married Prudence Wells, and for his 
second wife Mary Shennan. His grandson, Israel, by his 
first wife, married Elizabeth Reade; and their daughter 



l] the sherman Family. 23 

Elizabeth married Hon. Taylor .Sherman, who was the 
grandson of the Hon. Daniel Sherman, of Woodbury, and 
the grandfather of Secretary Sherman. The Rev. Anthony 
Stoddard was for sixty years pastor of the first church at 
Woodbury. He was, at the same time, not only a faithful 
and very successful minister of the Gospel, but a well 
educated physician and lawyer. He was Clerk of Probate 
for the district of Woodbury for a period of fort)' years. 
His intellect and acquirements were of a high order. (His- 
tory of Woodbury, pp. 140-141.) 

The Stoddards and the Shermans were rigid Presbyteri- 
ans. So remarkably firm was Mrs. Elizabeth Stoddard 
Sherman in that faith that she would go nowhere else to 
church. One of her grandchildren says: "She always 
made us stand around. Her will was law-. I could coax 
mother to let me do as I pleased, but never grandmother." 

The Hon. Charles R. Sherman, son of the above, a man 
of no less note than his more remote ancestors, lived in 
Norwalk, Connecticut, was admitted to the bar in 1810, 
and married Mary Hoyt. This was a union in every way 
worthy of both. The Hoyts were a numerous family in 
Norwalk, and among the early settlers. Many of them 
engaged in commercial pursuits. 

During the Presidency of Mr. Monroe, Mr. Sherman was 
made Collector of Internal Eevenue. Two of his deputies, 
being defaulters, involved him in financial embarrassment, 
from which he never recovered. This was the providential 
turn in affairs that threw his family upon their own re- 
sources, and made it necessary for John Sherman, of Ohio, 
to be trained in a school similar to that of his relative, 
Roger Sherman. 

"In 1811, C. R. Sherman and his wife started for Ohio, 
traveling on horseback, carrying their infant child upon a 



24 . HON. JOHN SHERMAN. [chap. 

pillow, alternately, before them. Being established per- 
manently in Lancaster, he rose rapidly to eminence as a 
polished and eloquent advocate, and as a judicious and re- 
liable counselor at law. Indeed, in the elements of mind 
necessary to build up and sustain such a reputation, few 
men were his equal, and fewer still his superior in the 
State of Ohio, or out of it. But it was not only in the 
higher region of legal attainment that he gained superi- 
ority; his mind was enriched with choice classical culti- 
vation." — (Hon. C. B. Sherman's Life, p. 4.) 

As we have had, among Mr. Sherman's ancestry, a 
person who came down from the pulpit and shot an Indian, 
so also have we a judge, who came down from the bench and 
preached a sermon. When failing one Saturday night to 
reach the place of holding the court on Monday, in com- 
pany with several prominent lawyers of Lancaster, they 
resolved, out of regard to the sacred day of rest, to remain 
at a small town over the Lord's day. As there was no 
minister of the Gospel there, Judge Sherman was pitched 
upon to hold service and preach, which he did to general 
acceptance. (Sherman's Life, p. 6.) 

A favorite anecdote of Judge Sherman, the sentiment 
of which indicates the character of our Secretary, as well 
as of his father, was the following Irish bull, uttered by 
Sir Boyle Rouch in the Irish parliament: "Mr. Speaker, 
the experience of my whole life has convinced me that 
the only safe way to escape from danger is to meet it 
plump in the face." The motto on the Sherman coat-of- 
arms is suggestive: " Conquer death by virtue" At the age 
of thirty-five, when Mr. Sherman was only fairly launched 
upon a successful legal practice, before accumulating more 
than barely enough to pay the expenses of settling in a 
new country, he was complimented by the Legislature of 



I.] THE SHERMAN FAMILY. 25 

Ohio with the appointment of Judge of the Supreme Court. 
True, it was complimentary, but it was little else. The 
salary of a Judge in Ohio, at that time, was scarcely 
enough to support a single man, to say nothing of a wife 
and a rapidly increasing family. But as the Shermans 
for five generations had mostly held judicial positions, and 
as that appointment might lay the foundation of a future 
and more extended legal practice, he accepted with reason- 
able grounds for bright hopes in the future. Those hopes 
were blighted. While on the bench at Lebanon, he was 
taken suddenly ill, and died on the 24th of June, 1829, 
being in his forty-first year. His widow was now left with 
limited means, and an abundant family, eleven children, 
the eldest eighteen years of age, and the youngest six 
weeks. To the rearing of these she addressed herself, with 
such care and patience and prayer, as can spring only from 
a pious mother's love. Sustained by Him who watches 
over the widow and the fatherless, she was blessed with 
remarkable success. From a regard to the future good of 
her family, she made a sacrifice of her own maternal feel- 
ings. Mrs. Sherman permitted one or two of her children 
to be taken into the family of an aunt, one into that of 
the Hon. Thomas Ewing, aftenvards to become Gen- 
eral W. T. Sherman, and John, into that of his cousin, 
John Sherman, a merchant of.Mt. Vernon, Ohio, where it 
was expected he would be educated and trained to busi- 
ness. 

The Hoyts, of Nor walk, Connecticut, were mostly Epis- 
copalians, as the Shermans and Stoddards were Presby- 
terians. But on coming west, and finding no church of 
her choice at Lancaster, Mrs. Sherman attached herself to 
the Presbyterian Church. When, however, she had an op- 
portunity, she returned to the Episcopal Church, and 



26 HON. JWHN SHERMAN. [chap. I. 

continued a devout member, till her decease in 1852, four 
years after that of her mother-in-law. 

Mrs. Sherman was known to the writer as a wpman of 
quiet, unobtrusive piety, courtly and aiiable in manner, 
calm and even in temper, and of a particularly command- 
ing presence. Her very look seemed to say, My authority 
must be respected. One that knew Aer could judge some- 
thing of the source whence the Secretary derived the firm- 
ness and caution that have carried him so successfully 
through a long career in the stormiest period of this Re- 
public, and all the time in the front rank of the conflict 



CHAPTER II. 

PERSONAL HISTORY. 

John Sherman, the present distinguished Secretary of 
the Treasury, was born in Lancaster, Fairfield County, 
Ohio, on the tenth of May, 1823, being the eighth child, 
the seventh born in Ohio. He was six years of age at the 
time of his father's death, and remained two years — only 
two years longer — under his mother's careful training, 
What that culture was, the writer has no other means of 
learning than what he can infer from the well known ten- 
derness and devotion of a consistently pious mother, and 
the instruction for little children enjoined by the church to 
which she belonged. As she was in heart and life, it was 
doubtless her aim to cause her little ones to be, We may 
well conceive that she took her church catechism, called 
them around her, and asked, "What is thy duty towards 
thy neighbor?" She prompting them, they answer, "My 
duty towards my neighbor is to love him as myself, and to 
do to all men as I would they should do unto me," etc. 
Under instructions like this, we may, from the results, be- 
lieve the child to have been reared during the first eight 
years of his Kfe, the most important of all in the formation 
of character. 

At the age of eight years, as before stated, his father's 
cousin, Mr. John Sherman, a merchant of Mt. Vernon, 
Ohio, a man highly respected in the community, having 

127) 



28 HON. JOHN SHERMAN. [chap. 

been under some pecuniary obligations to Judge Sherman, 
and fancying the boy because he bore his own name, begged 
permission of the widowed mother to take the child home, 
and treat him as his own. Then, at that early age, he 
bade adieu to his mother's care and tender caresses, and, 
as it proved, went forth to battle with the world for him- 
self. Mr. Sherman did all for him that a man could do, 
but the want of a mother's expressions of affection must 
have been sadly missed, as there was no one to lean on 
who could supply her place. But the precocious intelli- 
gence of the little boy doubtless prevented him from feel- 
ing it as another might have done. Still it gave a turn 
and tone to his whole life. 

Mr. Sherman remained in Mt. Vernon four years. At 
that time there were some thorough teachers in that place, 
such as Mitchell Miller and others, whose schools he at- 
tended. The whole four years found him regularly at 
school, and his progress was such as to justify the most 
sanguine expectations as to his future. It was certainly 
very remarkable, being at the age of twelve years, far ad« 
vaneed in Latin and mathematics. This was unusual pro- 
ficiency for one so young and so circumstanced. It showed 
that he had an inherent taste for learning, that it came 
easy and was w r ell treasured up. 

Of this period, Mr. Sherman writes to a friend thus: 
"The four years spent by me in Mt. Vernon I regard as 
the foundation training of my after life. Though the 
circumstances of my life were not very pleasant, being 
away from home, yet the schools were very good, and, as 
you remember, we had some very good masters, as we 
called them, among the rest Matthew Mitchell. The 
hard, severe training, both at school and at home, I always 



ii.] PERSONAL HISTORY. 29 

thought gave tone to my temper and character, and I 
would be glad to acknowledge that much." 

From there he was taken by his sister, and placed in one 
of the best conducted select schools in the then West — that 
of Samuel C. Howe, at Lancaster. The writer often at- 
tended the monthly examinations in Mr. Howe's school, 
and found the training of the pupils rigid and thorough. 
Among those educated at that time are several men of 
prominence. Years afterwards that faithful teacher re- 
turned to Lancaster, and pointed to these as "his boys." 
"John continued there," his sister writes, "till his fifteenth 
year." "This school," Mr. Sherman himself says, " was 
the best I ever attended, and when I left it in the spring or 
summer of 1837, I was reasonably prepared to enter the 
Sophomore Class in college. It was at this time that I 
hoped and anxiously wished to go to Gambier, but no 
member of the family seemed to be in a condition to ad- 
vance the necessary expenses." 

Then to help himself, and relieve his mother of a part 
of her heavy burden, he looked about for some employ- 
ment. The appointment of junior rodman, on the Muskin- 
gum improvement, seemed to be the most available, and 
was eagerly accepted by him. He spent two years on that 
improvement, which service, as to the practical affairs of 
life, was doubtless the best part of his early training. He 
was much in the open air, exceedingly important to health 
and strength, just as the physical system was being de- 
veloped, and in contact with ail sorts of people, some of 
them rough and lawless. He learned to take care of him- 
self, and from that time to this has been dependent on him- 
self, and has received no aid that has not been repaid with 
interest. 

One circumstance of no little interest, as betokening the 



30 HON. JOHN SHERMAN. [chap. 

courage and authority of the future man, should not be 
passed by. This, be it remembered, was in the early days 
of the temperance reform, when it required courage in its 
advocates. At this time a temperance lecturer appeared 
among the laborers, on the slack-water improvement, 
John°Sherman was the only one to sustain the agent, 
which he did with a speech. While the lecturer was 
seriously threatened with a mob, none ventured to re- 
proach our young engineer. There appears, even then, to 
have been a vein of candor, frankness and sincerity in his 
manner that commanded the respect even of opponents. 

In the Avinter of 1838-9, having but little to do on the 
improvement, and as it was not in him to be idle, pay or 
no pay, he embarked in a salt speculation, of which Mr. 
McComb, his brother-in-law, as long as he lived, u^ed 
jokingly to remind him. He undertook, though not six- 
teen years of age, to carry salt from the Muskingum River 
to Cincinnati, prompted partly by the hope of gain, but 
mainly desiring to see a city. He failed to make any 
money, through a severe frost, which detained his loaded 
barges on the Muskingum River until too late in the season 
to realize profit. Still he had his trip to Cincinnati, vis- 
ited his brother Lampson, in the family of Mr. Hammond, 
gained some experience of the world, was doing something, 
and for the first time saw a town of any magnitude. 

During his stay on the Muskingum Improvement he was 
much indebted to General Curtiss, or Colonel Curtiss as he 
was then called, who knew the family, and treated him as 
a son, and after a few months put him in charge of the 
work at Beverly, where he remained during most of his 
stay on the improvement. 

While there he still ardently cherished the hope of yet 
going to college, and at times studied very hard. By the 



ii.] ' PERSONAL HISTORY. SI 

mutations in politics, the Whigs went out, and the Demo- 
crats came in, Col. Curtiss was removed, and shortly after, 
most of the corps were dismissed for political reasons. 

In the summer of 1839 he was again adrift, and re- 
turned to Lancaster, where he spent the following winter, 
again preparing for college. 

In the spring of 1840, his brother, the late Hon. C. T. 
Sherman, being then in a good practice at Mansfield, in- 
vited John to come and help him in his law office, while 
preparing for college. He did this with reluctance, for he 
had other plans in view ; but he went, being guided by a 
wisdom higher than his own, and has had no cause to regret 
the move. Here he was so highly favored as to be near 
his uncle, Judge Parker, and for eight years to be some- 
what under the eye and influence of that firm and unbend- 
ing grandmother, who resided with her son-in-law, the 
Judge. 

Judge Parker was a man of leisure, and some fortune, 
and took a great interest in his nephew. This is not un- 
natural after finding out his indefatigable industry, and his 
facility in acquiring knowledge. He took great interest in 
examining him, and in directing his studies, being a man 
of great learning, an able lawyer, and a fine classical 
scholar. Judge Parker, after finding out what he was, and 
how far he had proceeded in his studies, advised him to de- 
vote his four years to the study of law, instead of dividing 
the time between college and law. The Judge took the 
general oversight and direction of the youth's studies, as 
his brother was very much occupied with the business of 
the office. John went at once to the study of Blackstone, 
Kent, and other old authors, on land tenures. The Judge 
continued to insist that his time was better spent in pre- 
paring for the law than it would be in spending a part of 



32 HON. JOHN SHERMAN. [chap. 

it in college. A man of Judge Parker's sound views would 
not have so advised, unless he had seen that his nephew 
was so far advanced in mental culture, that it would have 
been nearly a waste of time for him to follow the curricu- 
lum of a college. The writer of this will venture to say 
that even now, Mr. Sherman would in a summer's vaca- 
tion, if need be, fit himself to do credit to almost any de- 
partment of learning. 

The truth is, Mr. Sherman, with his four years' study, 
and not a little practice meanwhile, was unusually well 
prepared for admission to the bar. Gradually as his 
brother's business increased, he took charge of lighter 
cases, tried several before justices of the peace, and pre- 
pared all the pleadings, then conducted in the old-fashioned 
form, so that long before he was twenty-one he was entirely 
prepared for examination, and impatiently awaited the time 
when he could announce himself as an attorriey-at-law. 

A year or two before John was one and twenty, he an- 
nounced his purpose to leave Ohio and go to Iowa, think- 
ing that there was a better opening there. But his brother 
thought not. For more than a year before he was admitted 
to the bar, he was able to more than pay his way, and 
there was a distinct understanding, that as soon as that 
should take place, he should be an equal partner with his 
brother. 

He was admitted at Springfield, Ohio, the day he was 
one and twenty, and on his return to Mansfield, the part- 
nership was announced, and he commenced practice. 

When we are told that a young- man, admitted to the 
bar at the age of twenty-one, never laid by, clear of ex- 
penses, less than a thousand dollars a year, it seems need- 
less to inquire into his character as a lawyer. One thing 
is certain, viz: when a claim was sent to him for collec- 



ii.] PERSONAL HISTORY. 83 

tion, if paid by the debtor, the creditor was sure of his 
money on demand. No money was ever lost through him. 
This can not be said of all in that profession. Nor would 
he ever foment litigation, in order to fill his own coffer. 
When he gave advice it could be depended upon, as being 
for the real interest of his client. It must be remembered 
that his life as a lawyer only lasted from the age of twen- 
ty-one to thirty-one — ten years. There was not time and 
age enough to have acquired a world-wide fame. Yet he 
was all the time rising rapidly in the estimation of the pub- 
lic, as an advocate. It was his habit in court, just as it 
has been in Congress, to waste no time of court or jury 
upon matters of no importance, none in decorating a plea 
with the flowers of rhetoric, but to make his way, by the 
plainest and straightest road he could find, directly to the 
point or points he wished to make. As he always had 
something to say worth hearing, and took no more time 
than was needed to say it, he was always listened to with 
interest, and never failed in industry or logic to make the 
most of his cause. On these as his capital, he was fast 
growing in public estimation, and was often employed as 
associate attorney. Having become thoroughly acquainted 
with the laws relating to land tenure, he was somewhat ex- 
tensively employed as a railroad counselor. Especially 
was he so employed by the Pittsburg, Fort Wayne and 
Chicago Railroad, and in this way became a Director in 
that road, and holds that relation still. It is in the Direc- 
tors' meetings of that road that he and S. J. Tilden have 
opportunities to look each other in the face. 

The writer has lived nearly ten years in Mansfield, has 
never taken any .active part in politics, and has yet to 
hear the first word against Mr. Sherman as a man of 
honesty, integrity, sobriety, and purity. As to all the 



34 HON. JOHN SHERMAN. [chap. 

moral duties of life, and in all the relations of life, none 
can say aught against him. Take every command in the 
second table of the law, measure his life by it, from his 
entrance upon manhood to the present time, and if an ac- 
cusation be made the writer ventures to say there is no 
man living who would dare " throw the first stone." Lest 
in this respect the writer might be deemed partial, he 
avails himself of some extracts from an article in the 
Cincinnati Commercial of August 26th, 1879: 

" Mansfield's best title to fame at present is, that it is 
the home of the great financial Secretary, who has been 
the Moses to lead his people out of the Egyptian darkness 
of bankruptcy and insolvency, and threatened national 
dishonor and pecuniary distress, into the promised land of 
national integrity and general prosperity and content." 

Here among his fellow-citizens, Avhere he began life in 
an humble way, a poor boy, with all his future to shape, 
he is loved, respected, and admired, and men of all classes 
mention his name with pride as a citizen of this city. For 
two days I have been moving about incessantly among the 
men of Mansfield, and have talked with at least one hun- 
dred, or obtained the views of that number, and I can not 
^et trace of the least blot on the fair fame of the Secretary 
as a lawyer, a citizen, a business man, a husband, and a 
statesman. In every department of life, men who have 
been associated with him, or opposed to him, are equally 
warm in their praise and sincere in their tokens of respect ; 
and just such a character as Mr. Sherman sustains in his 
sphere does Mrs. Sherman sustain in hers. 

Said an old gentleman to me: J ' When John first came to 
Mansfield he was extremely economical, as was necessary, 
and never spent a cent unnecessarily. He had a quiet, 
determined manner, and once started in a direction, lie 



„.] PERSONAL HISTORY. 35 

could not be turned aside until he had succeeded or satis- 
fied himself beyond a doubt that he was not working to a 
successful result. He always won the confidence of his 
clients, and was noted for hard labor and hard thinking. 
He had no bad habits or evil companions, but gave his 
whole mind, and time, and attention to his profession and 
business. While not a good fellow and jovial companion in 
the usual acceptance of the term, he was always genial and 
affable to till, and seemed always more desirous of winning 
friendships through respect than establishing a reputation 
for good-fellowship. While he was a public-spirited and 
generous citizen, and far removed from any smallness in 
money matters, he was a shrewd financier, and naturally a 
money-making man; never, I believe, making a mistake 
in his calculations about investments. He made it a rule 
that he must each year lay aside at least $500, and regu- 
lated his expenditures in conformity with that determina- 
tion. He never failed to do it, and when he saw his $500 
safely invested, then he used more, if there was more, for 
pleasure, or was more liberal in expenses. 

"About six years after he began practice he was able to 
start the sash and blind factory, which he saw was needed, 
and that was worth to him about 85,000 a year for about six 
years. It paid him in all about $30,000. Almost every 
dollar he has to-day was made when he was a private citi- 
zen, or as the result of investments made during that time. 
He has very little to show for his long years of public life, 
or since he has been paid a salary." 

Some years ago a report was started that he had amassed 
great wealth. Well, he has enough to make him inde- 
pendent, but the insinuation was that there had been some- 
thing unfair about its acquisition. But the man does not 
live, and lias not lived, that dare make any such specific 



'M HON. JOHN SHERMAN. [chap. 

charge. Mr. Sherman has bought and sold real estate. 
Pie laid up and invested, not merely $500 a year, as Mr. 
Hedges says he resolved to do, but more than 61,000 a 
year, from the first year of his admission to the bar. He 
neither directly nor indirectly, by himself or his friends, 
dealt in any thing or bought any thing that belonged to 
the Government or could be affected by legislation. Xo 
such instance has been shown, nor can it be specified. If 
there had been such a case it would have been found out 
before this time, when there have been so many determined 
efforts to trip him up. 

While Mr. Sherman owns stock in some railroads, lie 
has been especially careful to invest in none that center in 
or about Washington, so as to avoid even the appearance 
of evil, or ot' being influenced in legislation by his personal 
inter* - s. 

In the article already referred to from the Cincinnati 
Commercial, is the following: u Mr. Sherman's property, 
all counted at a liberal estimate, is not much, if at all, 
over $100,000, and except some land in Iowa and a square 
of land in Washington, and his Washington residence, all 
is here in Mansfield, O. It consists mainly of his residence 
on West Market Street, with fourteen acres of land, a farm 
further west on the opposite side of the same street, for 
which he paid $8,000, the Stewart Farm, or 'Hill Farm/ 
as it is called, and some outlying lots. Mr. Wood and Mr. 
Hedges, two gentlemen who know as much about Mr. 
S .man as any other persons, state that his property will 
not bring over 8100.000. and that had he never gone into 
public service his wealth would have been at least half a 
million, at his rate of accumulation." 

As Mr. Sherman has used no unfair means in aeeumtdating 
property, he has never been successfully accused of expending 



H.] PERSONAL HISTORY. 37 

it improperly. He has never sought to accomplish his ends 
by constructive bribery nor promises of offices nor emolu- 
ment. It has been attempted to fasten such an accusation 
upon him, and failed. The Potter investigation has been 
on many a tongue, in the world of politics, for a long time* 
It was reported, and doubtless some believed, that Mr. 
Sherman had promised preferment to a certain official if 
he would make returns in favor of the Republicans, whether 
true or false, and that a copy of the letter making the 
promise could be produced, though the original was de- 
stroyed. A committee of the House of Representatives was 
appointed, and twenty thousand dollars expended in the at- 
tempt to fasten the charge of corruption and bribery upon 
the Secretary of the Treasury. What, it may be asked, 
was proved ? Simply that the letter was a forgery, — Mr, 
Sherman had written no such letter. But so carefully was 
it written, in order that it might be plausible and consist- 
ent with what was known, and thus confessed, to be the in- 
tegrity of Mr. Sherman, that it promised-— what ? Simply 
that if a certain official should be in danger of violence 
from doing his duty the government would protect him. 
Out of this forged letter was attempted to be fixed upon 
him the charge of bribery. But it signally failed ; it did 
not soil the hem of the Secretary's garment, but returned 
to plague the inventors, insomuch that a prominent poli- 
tician is reported to have said he would give a liberal 
upward if any thing could be found to overthrow the Sec- 
retary, but he was satisfied that no accusation could 
stand. 

Of this Louisiana accusation, the following is the de- 
cision of an eminent legal gentleman, who was conversant 
with all the facts relating to it, and most carefully scruti- 
nized the evidence and the reports on both sides, and these 



HON. JOHN SHERMAN. [ctfAr, 

accord with the writer's views, after a perusal of the testi- 
mony : 

''The gist of the attack on Secretary Sherman was, that 
in a letter to Weber and Anderson, men relied on to fur- 
nish evidence showing intimidation and violence in the 
Presidential election in Louisiana, in 1876, Secretary Sher- 
man, as one of the visiting statesmen sent by President 
Grant to Louisiana, held out promises to them, in the nat- 
ure of a bribe, to induce them to furnish the needed 
affidavits of violence and intimidation, so as to give the re- 
turning officers jurisdiction to throw out the vote of East 
Feliciana Parish, and that it was so thrown out by these 
means, thus secured by Sherman's bribery. The result of 
the investigation was to show — 

" 1. That the pretended letter was never written by Mr. 
Sherman, and was a forgery, 

"2. That Mr. Sherman's conduct in Louisiana was 
strictly in accordance with right and law ; and that he and 
his fellow 'visitors' were scrupulously careful to avoid, and 
that they did avoid, all interference with the officers of 
election, and all others engaged in making protests and re- 
turns as to the election. 

" 3. That what Mr. Sherman and his associates did was 
simply to consult with Republicans of Louisiana, and ad- 
vise as to the preparation of the evidence contemplated by 
the constitution and laws of Louisiana, to be produced, go- 
ing to show the violence and intimidation which require^! 
the rejection of votes. 

"4. That no act of illegality or impropriety was shown 
against Mr. Sherman.'' 

It may be a satisfaction to the reader of this sketch to see a 
part of the evidence given by Secretary Sherman before the 
Investigating Committee, at Atlantic City, July 24, 1878 : 



ii.] PERSONAL HISTORY. 89 

"Did you ever write that letter?" 
" I desire to say that I never wrote that letter. M 
"Now, is it possible that you could have forgotten the 
Writing of such a letter as that if you had ever written it?" 
"No, sir; I do not think it is. Nor do I think that it 
is physically possible for me to have written the letter on 
that day or at that time, or that I ever could have written 
that letter." 

"Have you any reason, other than those you have al- 
ready given, why you could not have written this letter?" 

"One reason why I know I never wrote that letter , why 
I am morally confident of it, in addition to those that are 
palpable en its face, is this : If I had written such a letter 
as that, why was it never presented to me, or why was it 
never shown to any body, so far as we know, until within 
the last three months? This letter, according to Anderson, 
was a letter procured by him to get an office solely — to 
hold as a leverage over myself and others to get office for 
himself and Weber; and yet Anderson never mentioned 
that circumstance to me— never said that he had a promise 
from me, never claimed that he had a promise from me. 
He was a constant beggar for office of every grade, from a 
consulship down, and yet he never produced that letter, or 
said that he had such a letter, or such a promise. I think 
that that of itself is strong evidence that he had no such 
letter, either original or copy. He says that he applied to 
me in March for an office, but lie made no reference to a 
verbal or written promise, as he would have done if he had 
such a promise ; nor did he make any such reference or 
claims to Senator Matthews, in all their full and somewhat 
angry correspondence. Nor did he make any such claim 
to the President nor to Judge Harlan. Although he was 
'pressing his claims for office on all those gentlemen, seeking 



40 HON. JOHN SHERMAN. [chap. 

to get the kindly offices of Mr. Harlan and Senator Mat 
thews, and constantly applying to the President, yet in all 
this struggle for office he never mentioned this letter. I 
consider that as a strong reason that it did not exist. 
The letter itself, I conceive, bears on its face the improba- 
bility that a man in my condition, under those circum- 
stances, would write such a letter as that, That is an 
argument which would strike a public man, engaged in 
public life, more than it would an ordinary citizen. I am 
made in this letter to say that, ' after a long and intimate 
acquaintance with Governor Hayes, I am justified in 
assuming the responsibility for promises made.' Such lan- 
guage as that could not be used by a public man of any or- 
dinary discretion. I know very well that, acting as we 
were under the obligation of a rule by which we refused to 
interfere in any way with the conduct of any officer, I 
would not undertake to give any assurance or guarantee 
(the word guarantee is a legal phrase, and I know the 
meaning of it), and that is an assurance that I never could 
have used such language. Therefore, when suddenly con- 
fronted with this letter when it was presented to me by the 
chairman, I could see that the first part of the letter might 
l)e true. I have no doubt I did say to friend and foe in 
Louisiana, that the Republicans in Louisiana who stood by 
their guns there deserved credit. I believed then, and I 
believe now, that the conspiracy to defeat a fair election in 
Louisiana was clearly and plainly proven, and I felt it as 
keenly as any fact in my life. If I had been a citizen of 
Louisiana I certainly would have been among those who 
were killed, because I would have resisted to the bitter end 
the organization of those rifle clubs, which were marching 
round at night and driving poor negroes to the swamps. I 
would have resisted, and probably have lost my life, as 



H .] PERSONAL HISTORY. 41 

others did. I have no doubt that, in conversation in New 
Orleans, I evinced a great deal of feeling, as I did in the 
Senate also. I made the same declarations there ; I make 
them now ; I made them in New Orleans. I say that there 
never can he peace and order and quiet while such things 
occur as occurred confessedly in Louisiana, in the fall of 
1876 — scenes of intimidation, and violence, and outrage, 
and wrong, that I can not read of now without a feeling of 
resentment. There could be no controversy about it. 
Here and there an ignorant negro man may back out from 
what lie said then, but the testimony was overwhelming of 
the existence, in certain districts there, of criminal vio- 
lence, intimidation, and wrong, which excited me to almost 
angry protest and remonstrance whenever I talked about it; 
and I can not talk about it now without a feeling of resent- 
ment. I have no doubt, therefore, that when this man 
says I said to him, what I said to every body who came near 
me, that these outrages ought to be redressed, that the 
people ought to be protected against such outrages, and 
that I believed they would be protected ; I have no doubt 
that I did say it to him, as I did to every body." 

" The very attempts of others to crush Mr. Sherman have 
only brought out the purity of his character in clearer and 
bolder relief. Nor does he owe his success to the aid of 
powerful friends. He was elected to Congress at the age 
of thirty-one; because, from a variety of circumstances, 
he seemed to be the man for the place ; and he has been 
kept in public life ever since, because he was wanted. He 
was wanted, because there were things to be done that no 
one else could do as well as he, and he could do them be- 
cause he was fitted for it. He was fitted for his work — 

1. By all the advantages derived from hereditary merit. 

2. By great mental capacity. 



42 HON. JOHN SHERMAN. [chap. 

3. By a strong will and untiring industry. 

4. By being, in early life, thrown upon his own re- 
sources. 

These advantages being marred by no counteracting 
vices, render him fit for all that has hitherto been in- 
trusted to him and for any office that he may hereafter be 
intrusted with. 

The following gives Mr. Sherman's present impressions 
respecting the origin of that letter. Says a reporter: "In 
the first place, I showed the Secretary a bit I had tele- 
graphed to the Enquirer from Washington about the Jenks 
letter, where a Democrat expressed the view that the letter 
had been manufactured by some strikers in order to make 
Mr. Tilden think he had found a prize, and to shell out 
money for more. Mr. Sherman said: 

" 'Well, as to that, I am pretty sure that Mrs. Jenks 
herself manufactured that letter. The best information I 
have is, that she dropped this letter in an envelope ad- 
dressed to herself, containing several inclosures, at a prom- 
inent dry-goods house in New Orleans, where she had gone 
to purchase something. The letter was dexterously slipped 
under some goods she did not take, and when she went 
away the envelope was noticed. The people who kept the 
store were radical democrats, and knew that Mrs. Jenks 
was suspected to have an original Sherman letter. They, 
therefore, opened the envelope, kept what it contained, and 
advised the Democratic managers that they had positively 
got the expected original.' 

"'She swindled the whole party at one swoop, then, 
Mr. Sinn-man?' 

" ' Yes, they instantly prepared their Congressional 
Committee to go to New Orleans, and they meant to pro- 
duce this letter on the spot and let it have a terrific effect. 



it.] PERSONAL HISTORY. 43 

But when they got the letter it slowly broke through their 
minds what a thorough swindle had been played on them 
by a mere woman. When that letter was submitted to 
experts, it was found absolutely impossible for me to have 
penned it. One of their best experts said to me, 'You 
could not have written that letter, sir, if you had practiced 
for years upon it. It is not in your hand nor education of 
your fingers to have written it.' They understand now 
how they were taken in." 

Mr. Sherman, it is true, did not have the opportunity 
of college discipline that some do, but he had the advan- 
tage of brains, and industry, and memory, and sound dis- 
cretion, such as are not found combined in one in a hun- 
dred thousand men of collegiate training. Few are capa- 
ble of accomplishing such achievements once in a life-time, 
as he has done every year for a quarter of a century. The 
writer of this has, in the course of fifty years as a teacher, 
had a great many students under his care, and in all his 
life he never found but two with mental capacity equal to 
that of John Sherman. So if Mr. Sherman had not the 
advantage of early classical culture, he has been thoroughly 
educated, in the matter of finance and every thing else that 
a statesman ought to know. If there is any advantage in 
an ancestry of clear-headed, honest-hearted, widely-trusted, 
and highly-honored men, for two hundred and fifty years 
past, it is Secretary Sherman's. There are minds that are 
more effective without classical culture than others are 
with. John Bunyan was without culture of any kind 
except what he derived from one booh, and he wrote the 
purest classic in the English language. Classical learning 
is never to be despised nor disregarded. It may help to 
enrich the most gifted minds, but what can the most fin- 
ished culture do towards the training of a statesman? If 



44 HON. JOHN SHERMAN. [chap. 

a man can think the best and most effective thoughts, de- 
vise the best methods, dress them in the most appropriate 
garb, and know exactly when and where to present them, 
and infix them into the most minds, is not his the best 
culture for a statesman? What could Mr. Sherman do 
with the rich drapery of lore, ancient or modern? He 
would never put it on. He has no time for it. He is too 
earnest, too much in haste to accomplish his ends. He 
will not use stilts so long as he has solid ground to walk 
on. Mr. Sherman's power lies in being able to make every 
word tell to the best advantage. His taste has ever been 
for politics, and, therefore, state papers of all past ages 
have been carefully studied, and without ever thinking 
what dress his thoughts should wear, or in what style he 
should clothe them, that style has unconsciously been 
formed upon the best models of English and American 
state papers. In such the best style is to get as much 
thought as possible into the fewest words. Take an illus- 
tration of this. The writer knew a stone-cutter once. He 
came from Wales. His hands were as white and his skin 
as fair as a lady's. No one w T ould suppose lie ever handled 
a mallet and chisel. That man, with comparatively little 
fatigue, would do nearly twice the amount of work in a 
given time that could be gotten out of the hardiest of 
workmen around. How so? He never struck a blow till 
the chisel was in the right place. He never made a facing 
that had to be made over again. So with Mr. Sherman. 
He wastes no time nor energy upon the winds, but drives 
directly at conviction. Mr. Sherman's classics are state 
papers, his mallet a brave and persevering will, his chisel 
the finest steel of common sense, and its edge truth and 
equity. 

Besides, Mr. Sherman's capacity for learning, as well as 



ii.] PERSONAL HISTORY. 45 

tenacity in retaining it, must be exceedingly great, and 
only surpassed by his industry in acquiring knowledge : so 
that it can never be said he is without that peculiar cult- 
ure that fits him for his position and his work. 

Another characteristic of Mr. Sherman is that he always 
knows where his tools are. Some may think there is too 
much "red tape" about him, but if there is, it is natural 
to him. With him, every thing must be in order. He 
came even from Washington to see that " his fences" were 
in order ! If a debt is due him it must be paid, if he has 
to give the money to pay it with, as was actually the case 
in one instance known to the writer. If a debt is due him 
he expects it when due, not before. His mind acts, too, 
with tremendous rapidity. This, with the perfect order 
with which it acts, enables him to approach almost any 
subject at once, and so logically do his thoughts flow, one 
after another, that he seems to be well prepared. Then, 
again, he never employs an instrument till he has learned 
how to use it. He never speaks without understanding 
his subject. • 

That Mr. Sherman had naturally a very keen temper, 
and one easily excited, may readily be inferred from his 
whole course in Congress. Had there not been within a 
strong passion, easily aroused when insulted, he would have 
been overrun and trodden down, by the end of the first 
term in Congress, in his frequent conflicts with " Southern 
chivalry." 

A keen temper is said to be as necessary for a man, as 
for a knife, and Mr. Sherman's temper must have been 
often put to the test. But that temper was, and is, under 
the most complete control. Once only in Congress did it 
master him. That was when lie threw the wafers at the 
M. C. Thev were less hurtful, however, and served a 



4G HON. JOHN SHERMAN. [chap. 

much better purpose than bullets. But the fact that such 
a spirit, so fearless, mastered him but once in all his public 
life, speaks volumes in regard to the force of his character. 
Few men, of those who make louder professions than he 
does, have all their appetites and passions under as perfect 
control as Mr. Secretary Sherman. The writer has never 
heard that a word of scandal was ever uttered against him. 
Hi, food and drink, as to quality and quantity, and his 
hours of business, of recreation, and of rest, are all arranged 
as methodically as possible, with a due regard to the pro- 
motion of health, and activity of body and mind. None 
of his energies are wasted in dissipation nor in luxury; and 
yet he is generous and hospitable. It is said that ambition 
masters him. Well, it may as well be ambition as any 
thing, and the man does not live that is not mastered by 
something. But if ambition does govern him, all the 
means of gratifying it are under the control of an indom- 
itable will. If his aim in life has been to reach a high 
position, his will has ever been to deserve it by faithful 
service, and attain it by fair and honorable means. Of 
low and mean art, or cajolery, or bribery, or any thing 
that shades that way, he never was accused successfully. 
If he can not attain elevation otherwise than by doing 
wrong, he will go without it. 

He is possessed of a strong will, and one that is prompt 
to act. A characteristic fact is mentioned by one of his 
neighbors, which clearly evinces this fact, as well as his 
courage. While quite a young man, at an election, politics 
ran high, and the polls being held in a place with a long 
narrow entrance, the opposite party got possession and 
blocked up the way with a view to keeping their opponents 
out. There they stood, some of them old men, besieging 
the entrance. Mr. Sherman came up with his slim, wiry 



n .] PERSONAL HISTORY. 47 

frame, threaded his way through the crowd of his political 
friends, turned round and said: "Whigs, stand firm," and 
then led the way through the throng to the place of voting, 
followed by his party friends, without further opposition. 

The chief of a bureau came to him one day lately, in 
Washington, for an order to pay for some machinery. 
"Has it been advertised?" said the Secretary. " No," said 
the chief; " there are but two places where it can be made, 
and we are accustomed to get their bids, and contract with 
the lowest." "But," said the Secretary, " the law says it 
must be advertised." " But at least this may pass, for it 
is made, and we need it." "I can not help that; the law 
says it must be advertised, and advertised it must be." 

And yet with all this firmness, he is not stubborn. He 
is ready to yield any thing that is not wrong, nor in vio- 
lation of law. No one was ever more successful than he 
in conciliating widely conflicting views and opinions, yield- 
ing his own preferences, and thus working his measures 
through Congress. When he could not get all that he 
wanted, he would take what he could get, and bide his 
time to get the rest. To be thus firm, and not stubborn, 
is a trait of great value in a legislator or public officer. 

The following editorial from a Mansfield paper will show 
the estimation in which he is held by his own immediate 
neighbors : 

" We have watched with interest the discussion in the 
press as to the election of a Senator from Ohio, and have 
been highly gratified with the manifest concentration of pub- 
lic opinion in favor of the re-election of Senator Sherman. 
He grew up among us, and is personally known to nearly 
all our readers. He came here a lad to study law with his 
brother, Judge Sherman, and from 1844, when admitted 
to the bar, lie has steadily risen in public estimation. For 



43 HON. JOHN SHERMAN. [chap. 

ten years he practiced law, and engaged in active business 
of various kinds. He was attorney for, and aided in the 
construction of, all the railroads that center here. When 
lie was elected to Congress, in 1854, he carried this county, 
though a Democratic county of over fifteen hundred 
majority. He was four times elected to Congress by a 
majority of over 3,000, and after the first time, was nom- 
inated without opposition. Since his transfer to the Senate, 
we have observed his advancement with a natural pride, 
and now, in the contest that is going on, he has the hearty 
support of his old constituents. No man could have pur- 
sued such a career, holding always a leading position among 
his fellow-members, without talents of a high order. In all 
the leading questions of a time fruitful of great events and 
difficult problems, Mr. Sherman has been prominent in 
debate, industrious in committee, watchful, attentive, and 
prudent, and now his influence in the Senate is conceded 
by all to be equal to that of any member of that body. 
Ohio has been conspicuous in national events, in civil and 
military life, and we feel that Mansfield has contributed 
her share. 

"We feel sure that if the Democrats were to choose a 
Republican senator, three-fourths of them would prefer 
Senator Sherman. 

" In social life among us he is plain, unostentatious, ea?y 
of approach and popular, and his wife, a native of Mans- 
field, is even more so." — Mansfield Herald, Dec. 21st, 1871. 

Take also the following from a New York correspondent 
of the Philadelphia Times: "Mr. John Shernfan is con- 
ceded the shrewdest man in the Cabinet. He is by far the 
ablest politician connected with the Hayes administration. 
Hence his views on any phase of the political situation, 
from a Republican stand-point, are always worth perusal. 



II.] PERSONAL HISTORY. 49 

Sherman has been described as a cold-blooded man of 
brains, of the Charles Francis Adams school. It may be 
so. But ask any newspaper man about Washington, whose 
business has brought him into contact with high officials of 
this and other administrations, and he will immediately say 
that Secretary Sherman is one of the most accessible and 
courteous of a long line of public men." 

The year of Mr. Sherman's attendance upon the National 
Convention, at Philadelphia, 1848, was that in which he 
was joined in marriage with Miss Cecelia Stewart, daughter 
of the Hon. James Stewart, of Mansfield. Mr. Sherman 
has, by the favor of God's providence, made several re- 
markably good hits in life, as this narrative will show, 
but the grandest of all was when his lot in life w 7 as joined 
with that of Miss Stewart. If it be true that "he that 
findeth a wife findeth a good thing," it is very certain that 
Mr. Sherman found a ivife, and as certain that she found a 
husband. Judge Stewart stood high in his profession, and 
his social position was all that could reasonably be desired. 
His memory is still regarded with reverence by those who 
knew him. He had ample means* of giving his daughter 
as good an education as the schools at that time afforded, 
and she had a mind and will capable of making the best 
possible improvement of her advantages. 

A story is current among her friends which, if true, 
shows remarkable forethought in a girl at school, and that 
she can scheme to some good purpose as well as her hus- 
band. The story is as follows: Several companions were 
laying plans one day as to what they would do in after life. 
They talked, doubtless, as most girls would. When it 
came her turn she said, "It will be my aim to make 
my husband as much of a man as he can be." The reader 
will learn how well this scheme was carried out. 



50 HON. JOHN SHERMAN. [chap. 

It is said "the course of true love never did run 
smooth." If this is so, then storms and disappointments 
that sometimes precede marriage form really auspicious 
omens of connubial bliss. It proves that in this, as in the 
higher zone of spiritual life, "the cross shall wear the 
crown." If such were the case preceding this union, the 
auspicious omens have been pre-eminently verified by the 
results. So far as can be learned, from an acquaintance 
of several years, it is believed that Mrs. Sherman never 
says a foolish word or does a foolish act. She never lays 
aside her dignity nor passes contemptuously by her poorest 
neighbor. Her reading is more scientific and solid than is 
common in these times, and her cares and activities more 
diversified. While she never neglects her household, she 
seems as much interested in out-of-door affairs as in the 
drawing-room. It is said that she owns a firm that was 
her father's and grandfather's, and that Mr. Sherman owns 
one, and that once they were upon a strife to see which 
should reap the largest profits. The result was in her 
favor. Probably he was more absorbed in his senatorial 
duties than she was, and did not "keep up his fences" 
quite so well as she did. At all events Mr. and Mrs. 
Sherman are a strong team, and co-operate admirably in 
doing the work of life. There is no doubt of its being her 
end and "aim to make her husband as much of a man as 
he can be," and the material appears to have been all that 
her ambition could have desired. The writer has dwelt 
more fully than some may think appropriate, upon the 
character and accomplishments of Mrs. Sherman, because 
he believes that a happy marriage is a decided element in 
the Secretary's success in life. 

As to the fact of Mr. Sherman's irreproachable moral 
character, these pages will abundantly test ifv. Xo professed 



lb] PERSONAL HISTORY. 51 

Christian ever governs self and every appetite more thor- 
oughly than do Mr. and Mrs. Sherman. They have never 
been communicants in any church, but are believers and 
liberal supporters of the Protestant Episcopal Church. 
Mrs. Sherman was brought up in the United Presbyterian 
Church, but since her marriage with Mr. Sherman she has 
faithfully attended that of his choice. 

While he was in Congress it was their custom to pass 
the summer at their delightful home in Mansfield, and 
commonly, once at least during their stay, the Sunday- 
school scholars of the writer's church, and their friends and 
neighbors, were invited to a gratuitous lawn festival, on 
Mr. Sherman's beautifully-shaded grounds. It is quite 
certain that the little folks of that church, while they 
remember Mrs. Sherman's richly-laden tables, beneath 
that dense foliage, and the zest with w 7 hich Mr. Sherman 
played croquet with them, or watched their playing, will 
never say of him, as a noted orator at the East is reported 
to have said, that " he has no heart." 

Mr. Sherman's interest in the temperance cause began 
at an early clay in the movement. His first speech in its 
favor was when he was a junior rodman on the Muskingum 
Improvement. Then it was that he boldly stood up and 
defended a temperance lecturer who was on the point of 
being mobbed by the laborers. It required courage to be 
a temperance advocate then, and on such occasions Mr. 
Sherman is always in the front rank. But at that time 
only alcoholic liquors were excluded, and since then Mr. 
Sherman, with such men as the sainted Mcllvaine, and 
the present Dr. Crosby, of New York, has never changed 
his creed, and Mrs. S. is a unit with him. It is perfectly 
safe to say that no man ever saw Mr. Sherman in the least 
excited by any stimulating beverage. The facts that he 



52 HON. JOHN SHERMAN. [chap. 

was twenty-four years in Congress and never in a broil, 
when any thing but wafers passed, that he was compelled, 
often upon the spur of the moment, to pass judgment upon 
matters of the greatest importance, and on which good men 
differed, and yet the results proved he was right, are 
sufficient without further testimony to demonstrate that his 
keenest perceptions were never impaired by surfeit of any 
kind whatever. 

A correspondent of the Boston Herald has drawn an in- 
teresting picture, which gives a very just view of Mr. 
Sherman, his habits and mode of life, and is here inserted 
as a corroborating witness : 

Washington, D. C, July 19, 1879. 
Secretary Sherman is a little late in making his acquaintance 
with the New-England public. When Congress meets next year, 
after the Presidential election, a period of twenty -five years will 
have elapsed since Mr. Sherman first entered Congress and be- 
came a National man. In a quarter of a century of constant 
political service, one might suppose that the people of New 
England would have come to know him well. Yet I have an 
idea that personally he is almost as unknown as Mr. Hayes him- 
self before he became President. A shrewd old man, who knows 
National politics to the core, spoke of John Sherman to me not 
long ago as " a man without a friend in the world." Interpreted 
in one way, this remark is not far from the truth. Of the kind 
of friends which some of our ambitious public men cultivate, he 
is absolutely destitute. When Salmon P. Chase was a candidate 
for the Presidency, fifteen years ago, a set of conscienceless news- 
paper writers were hired at so much a week to puff him through- 
out the American press. They did the job thoroughly while the 
pay lasted, and some of them have been exalting the profession 
of journalism ever since. Mr. Sherman is reputed to be as well 
able as Mr. Tilden himself to maintain a literary bureau, but 
that does not happen to be his way. If there be any one person 
in politics or journalism who, more than another, has the ear 
and the attention of Mr. Sherman, I do not know who that inti- 



it.] PERSONAL HISTORY. 53 

mate person is. I have never known Mr. Sherman to treat any 
person who has called upon him otherwise than kindly and cour- 
teously, and I have never known any one to presume to trade 
upon or boast of his influence with him. Most of those who 
know him regard him as a "cold" man— which, I am happy to 
say, he is. We have so many statesmen, nowadays, who are not 
"cold !" No one can get a thorough comprehension of the state 
of politics and society, during the first years of the Republic, 
without realizing the pangs which numbers of the people's lead- 
ers felt because they were not permitted to slap the father of his 
country on his back. They regarded any public man, whose back 
could not be slapped in a familiar way, as tending toward a 
monarchical system of government. Very much the same feeling 
prevails to-day toward any man who does not let himself down to 
the level of "the boys," and Mr. Sherman is one of these men. I 
could name three or four Presidential candidates who permit the 
lowest and dirtiest of adventurers to associate with them on inti- 
mate terms in private. Mr. Sherman does not do this. He has 
no clique in Washington. 

It was, perhaps, natural that Mr. Sherman, taking the place in 
the Senate of the United States to which Mr. Chase had been 
chosen in 1861, should have taken the lead on financial questions 
in that body. But he could not have done this if he had not 
already led off' as an economist and a financier in the House of 
Representatives, and he could not have taken the lead which he 
did in either House without great intellectual aptitude for this 
branch of statesmanship. 

He could not know in 1861-'65 that it would fall to him fifteen 
years later to complete in the Treasury Department the work 
which Mr. Chase was then laying out for the future. But if he 
had known that such was to be his task, he would have proceeded 
to concentrate his attention, as he did, upon the finances. Having 
been Chairman of the Committee on Ways and Means in the 
Thirty-sixth Congress, it was natural that, on his promotion to 
the Senate, he should have a place on the Finance Committee. 
When Mr. Fessenden, the chairman on that committee, was ap- 
pointed Secretary of the Treasury in place of Mr. Chase, Mr. 
Sherman became chairman of the committee, and, when Mr. Fes- 
senden returned to the Senate in I860, Mr. Sherman gave up the 



54 HON. JOHN SHERMAN. [chap. 

position to him. In 1869 Mr. Sherman again succeeded Mr. Fes- 
senden as chairman of the committee, and held the position up 
to the time when he became Secretary of the Treasury in 1S77 — a 
period of eight years. Xo other man in Congress concentrated 
his attention on this one subject as Mr. Sherman did, and no one 
else wielded a larger influence. Mr. Sherman alone, of all the 
statesmen of the period, since the death of Sumner, has been able 
to make a printed volume of his speeches. He is the only man 
in the United States government whose views on any question of 
public affairs in extenso are obtainable in book form. The dis- 
tinction is one that deserves to be emphasized. So few of our 
public men ever print any thing outside of the pages of the Con- 
gressional Record; so many of them never read any thing, appa- 
rently, except the Record and the newspapers. There were many 
reasons why, when Mr. Hayes became President, he desired to 
have Mr. Sherman for his Secretary of the Treasury. If there 
had been no other reason, his personal fitness for the place was a 
sufficient one. 

The royal road to the AVhite House ought to pass through the 
Treasury, but it seems never to have done so. No man has put 
himself in the way of being elected to the Presidency by render- 
ing the country great service as Secretary of the Treasury. Some- 
thing has always occurred to put an end to the political prospects 
of our financial ministers. Hamilton was the greatest of finan- 
ciers, but his party melted away from behind him, and he fell, 
ultimately, in a duel. Gallatin was as wise and skillful as a 
statesman could be, and the war of 1812 and Jefferson's jackals 
drove him out of politics. We run along down the line, noting 
many able men, until we come to Salmon P. Chase. He became 
a candidate for the Presidency while Secretary under Mr. Lin- 
coln, and Mr. Lincoln was obliged not only to outmaneuver him 
as a candidate, but to take him out of his Cabinet. How many 
people know that the advent of William E. Chandler in national 
politics was the result of Lincoln's desire to have an Assistant 
Secretary of the Treasury who would watch Mr. Chase? Mr. 
Chase remained a candidate until he died, but he never got even 
a nomination. Then we had the case of Mr. Bristow, the candi- 
date of the reform Republicans in 1876. Pie owed his political 
prominence to the fact that he was Secretary of the Treasury, 



„.] PERSONAL HISTORY. 55 

and, just because he was Secretary, he could not get the nomina- 
tion. Now we have Mr. Sherman a candidate for the Presidency 
under circumstances very different from those by which any 
Secretary was ever surrounded before. 

In the first place, Mr. Hayes is entirely and cordially in favor 
of making Mr. Sherman the candidate next year. For a Presi- 
dent at the end of a first administration to give his support 
heartily to his Secretary of the Treasury for the succession, is an 
unexampled thing in politics. It enables the Secretary to put 
his candidacy at once on the open ground of fair, decent ambi- 
tion and endeavor. It obviates all jealousy and bickering, and 
gives the Secretary an advantage in the contest for the nomina- 
tion never possessed by any of his predecessors. In the second 
place, Mr. Sherman has the respect, and, in a large measure, the 
confidence of the business interests and the wealth of the country. 
He is identified in the popular mind with the resumption of 
specie payments, which has turned out to be nothing but the ban- 
ishment of a doubt and a debate. We were down to hard-pan 
before. All that needed to be done was to convince a lot of fool- 
ish and ignorant people of the fact. Mr. Sherman has the credit 
of doing this. The refunding of the debt, which was the inevita- 
ble result of the abolishment of the premium on gold, has fol- 
lowed, and astonished the country. It has been managed with 
the greatest skill and vigor by the Secretary, and the recognition 
of his agency in the business is universal. There is another side 
to his administration of the Treasury Department, which the 
public does not see. As an executive officer, Mr. Sherman's equal 
has not been seen in the Treasury Department during the last 
cpiarter of the century, which is the same as saying during mod- 
ern times. His power of concentration and of rapid work is 
extraordinary. His comprehension of the working of the depart- 
ment is perfect, and his knowledge of its development during the 
war period is complete. He has watched every part of this ma- 
chine as it has grown to its present enormous proportions. He 
is, in fact, as familiar with the department as if he had been 
Secretary for the past twenty years. It will be noted that, since 
he has been at the head of it, there have been no scandals in the 
department. Abuses have been corrected, and the great machine 
has been put in excellent order. Every person in the department 



56 HON. JOHN SHERMAN. [chap. 

feels that nothing can go amiss without the knowledge of it 
coming to the Secretary. The discipline, if that is the word to 
use, is, therefore, better than it has ever been since the depart- 
ment reached its present proportions. 

If Mr. Sherman gets into the White House he may do many 
things that are not yet thought of. If he does not get there he 
may go back to the Senate again from Ohio in 1881, the prospect 
being that his party will control the election of Mr. Thurman's 
successor. Unless he shall become President, his fame must rest 
with his achievements in the Treasury. Outside of his connec- 
tion with the finances it is difficult to make much out of his 
career in Congress. Always a strong and dignified figure, he 
seems to have had a happy faculty of concentrating his powers 
on practical questions of affairs, and has let others do the polit- 
ical slang-whanging. He entered the House of Representatives in 
1855, at the first session of the Thirty-fourth Congress. He had 
been a Conservative Whig, and had represented that party in its 
Conventions in 184S and 1852. He succeeded a Democrat named 
Lindsey in the Thirteenth Ohio District, and was elected to the 
three succeeding Congresses, not serving out his term in the 
Thirty-seventh Congress on account of his election to the Senate. 
His first vote was cast for X. P. Banks for Speaker, and he sup- 
ported him warmly. In this Congress he was a member of the 
Committee on Foreign Affairs. Being a new member it was im- 
possible for him to take a very prominent part. He mingled in 
the debates occasionally, and figured as a determined opponent of 
slavery from the first, following in the footsteps of his colleague 
Giddings, and of AVade and Sumner in the Senate. I notice, how- 
ever, that he took a considerably more prominent part than Mr. 
Bingham, who entered Congress at the same time. The greater 
struggles over the slavery question in the House were already 
ended in that body, for in the election of Banks, after a two 
months' struggle, the Southern Democrats saw their power pass- 
ing a wa v. From this time onward to lSb'O the House of Repre- 
sentatives was more like a camp in whijh two hostile armies stood 
facing each other, with nothing but a dead line between them. 
Those were the days when men on both sides carried revolvers and 
knives, and hissed murderous threats at each other across the 
middle aisle of the Representathes' hall. SI erman came in too 



n .] PERSONAL HISTORY. 57 

late to take a very prominent part in the slavery debates, but he 
was always "game,'' as the boys say, in all the conflicts that 
arose. A gentleman who served with him in the Thirty-fourth 
and Thirty-fifth Congresses, narrated to me an incident that 
shows the sort of feeling that prevailed in those exciting years. 
One day in the House, a member from Tennessee, named John 
V. Wright, took exception to something that Mr. Sherman had 
said, and walked over from his seat to the Republican side, pro- 
ceeding up the aisle in a threatening manner toward Mr. Sher- 
man, who was in his seat. He made some offensive remark as 
he came within ear-shot of the Ohio member, who instantly 
grasped a box of wafers, such as was then daily placed on every 
member's desk, and threw it in the Tennesseean's face. The oc- 
currence attracted attention, and it w T as expected, by all who saw 
Sherman's act, that there would be a fight, but the Tennessee 
bully, after hesitating a moment, shook the wafers from his head 
and shoulders, turned about and walked away. The incident has 
never got into print before, and it is said that Mr. Sherman never 
liked to refer to it. In the Thirty-sixth Congress Mr. Sherman 
became the Republican leader, and was made the candidate for 
Speaker. The contest that ensued w«as as long and as exciting as 
that which resulted in the election of Banks four years before. 
Mr. Sherman had indorsed Hinton Rowan Helper's book, The 
Impending Crisis. He claimed not to have known what were its 
contents. The Free Soilers from the Middle States would not 
vote for him, and his friends were finally obliged to abandon his 
name and to unite on Pennington, of New Jersey. The contest 
ended in Pennington's election February 1, 1860. Fourteen 
months later the Southerners were leaving Congress and making 
ready for war, and Mr. Sherman was elected to the Senate. That 
Mr. Sherman should have been taken up for the Speakership 
shows that he had already gone to the head. Had he been then 
elected Speaker of the House he would probably have held the 
position through several Congresses, unless he had chosen to give 
it up for a place in the Senate. After twenty years of arduous 
political life, Mr. Sherman seems to be again becoming as promi- 
nent as he was in the winter of 1859-60. 

When Secretary Sherman went into office he determined to lend 
all his efforts to the resumption of specie payments, and to make 



58 HON. JOHN SHERMAN. [chap. 

all his fiscal management tend to that end. From that object 
neither friend nor foe has been able to swerve him. He decided 
at the very outset to pile up as much money in the Treasury as 
he could until resumption was accomplished, and to that end he 
scrutinized every demand that was made upon the Treasury for 
money, and determined to pay no money out which he was not ab- 
solutely compelled by law to do. The Secretary has a vast dis- 
cretion in the time of paying many claims and demands upon the 
Treasury, and he never hesitated to exercise it in favor of his 
"reserve" fund. It made no difference how hard any friend 
might plead with him for favors. He had none to grant, and the 
men who supposed they had the right, on personal grounds, to 
ask consideration from him, discovered that for once their influ- 
ence went for nothing. I recollect hearing a claim agent tell some 
time ago of what occurred in regard to one claim that was pend- 
ing before the department. The claimant, finding that he could 
not get what he wanted, employed Mr. Shellabarger as his counsel. 
Mr. Shellabarger has been Mr. Sherman's lawyer in all the polit- 
ical investigations that have been set on foot against him since 
1876, and is one of his strongest adherents. Mr. Shellabarger 
went to him at the department, and laid the case in question be- 
fore Mr. Sherman. The Secretary at once informed him that, 
having looked the matter over, he had made up his mind about 
it, and, having made up his mind, neither Mr. Shellabarger nor 
any one else could change it. He then turned to his desk and 
went on with his work. Mr. Shellabarger could do nothing but 
abandon the business, and he came away from the department de- 
nouncing the Secretary sharply for his imperviousness to reason in 
the matter. 

Of the personal and private life of Mr. Sherman it is a pleasure 
to speak, although there is not very much to say. It is quiet and 
simple. I have three pictures of Mr. Sherman in my mind. The 
first is of the Senator as he stands in his place in the chamber, 
talking in his calm, but very direct and vigorous way, on the sub- 
ject in hand, his tall figure bent a little over his desk, upon which 
he rests his hands when he does not use them for a gesture, which 
he does but seldom. His remarks, whether long or short, 
are models of clear and straightforward utterance. His deport- 
ment as a Senator is never open to criticism, for he is always at- 



„.] PERSONAL HISTORY. 59 

tending to the business in hand. Then there is a picture of the 
Secretary of the Treasury, seated at his desk, from which he looks 
up and gives you a pleasant good-morning as you enter, but keeps 
his eyes on his papers as he answers your interrogatories, unless 
you have something very important to demand his attention. 
The desk before him, however, deeply covered with letters and 
official documents, is never in disorder. Mr. Sherman never 
wastes any time on any body, and the man does not live who can 
bore him for any length of time. If the caller does not know 
when his business is done, he is soon put in a way of finding it 
out, and yet the Secretary is never blunt or brusque like his 
brother Tecumseh, who has n't as much business to attend to in a 
week as John has in one day. The third view of this man is his 
appearance in his home— a modest and comfortable house on 
Franklin Square. At home he seems always to sit at the end of the 
table in the rear apartment, which answers for library and dining- 
room. There he reads his papers, writes his letters, smokes his 
cigars, talks to his friends, and I suspect that when he leaves that 
seat he leaves it to go to his office or to his bed. In the morning 
he always walks to the Treasury Department, carrying a light 
cane, and walking at a rapid pace. The distance is hardly a quar- 
ter of a mile. In the afternoon he rides out, as is the custom with 
. all the members of the Cabinet, before dinner. The evenings are 
usually spent at home in the society of his wife and adopted 
daughter, who compose his household. His home and every thing 
about him, his dress, his horses, etc., are all plain and unostenta- 
tious. And, although he is reported to be worth half a million of 
dollars, his manner of living is apparently as quiet and moder- 
ately expensive as when he depended upon his annual salary alone. 
In fact, his life, in its quietness, its dignity, its freedom from 
frivolity, and its careful economies of time and strength, is more 
like the life of some great private banker or capitalist than like the 
life of the average American politician. 

The following is Mr. Sherman's account of throwing the 
wafers, in a conversation reported for the Cincinnati En- 
quirer: 

"Didn't you have a fight once on the floor of Con- 
gress with a Southern member?" 



GO HON. JOHN SHERMAN. [chap. 

" The only difficulty of that sort I had was with a man by 
the name of Wright, from Tennessee. He was a man who 
drank hard, and came on the floor in that condition. I 
was making a speech one day, and came to the end of a 
sentence, when this man said, 'That's a lie.' He was 
some distance from me, and I did not hear it; but the re- 
porter did hear it, and put it down in his transcript, so that 
the next day it appeared in the Globe newspaper. This 
made me mad, and I arose on the day following to a ques- 
tion of privilege. I said that I had not heard any such 
remark made, and presumed that the gentleman from Ten- 
nessee who did make it, as the reporter had heard it, was 
in such a condition that he did not know what he was say- 
ing. At this Wright arose as if to make a reply, but his 
colleagues pulled him down. A little while after he came 
around to speak to some of the Southern Americans, or 
Know-Nothings, who sat just around me. He addressed a 
remark to one of these, and as he did so looked at me with 
some insolence. I arose at once and picked up a cup of 
w y afers, such as lay on the desk of every member at that 
time, and threw the contents in his face. He had a pistol 
at his hip, and tried to draw T it on the floor, when he was 
suppressed by the other members. However, the incident 
made a great impression on the House, and led to an early 
adjournment, as there was every expectation of a duel or 
an affray. It was known that I was no duelist, but Avould 
repel an assault. A member from the Southern element 
came to me to find out what I meant to do. I told him 
that I should repel any physical attack on me with interest. 
He then instructed me that if the sequel of this incident 
was to be an assault instead of a duel there could be but 
one assault — that the fight had to begin and end in a sin- 
gle encounter. He told me to be ready. I got a pistol 



IL ] PERSONAL HISTORY. 61 

and put in my pocket, and I was a good shot. I never 
felt cooler in my life, and I made up my mind the instant 
Wright approached me with a hostile intention I would 
shoot him dead. A friend of mine, capable in such emer- 
gencies, walked out of the Capitol with me, and as we de- 
scended the steps on the side next to the city, and came to 
the fountain which flows half way down the several flights 
of steps, there I looked, and coming around the other side 
of the fountain was Wright, also accompanied by a col- 
league. I walked toward him, looking him in the eye, 
with my hand on the pistol, fully determined to shoot him 
if he raised his hand. But he did nothing of the kind. 
He probably saw what was in reversion for him, and I 
went right past him without suffering an encounter. He 
afterward turned out a drunkard, and died a drunkard. 
The remarks passed on him at home in Tennessee on ac- 
count of his cowardly behavior at that time used him up." 



CHAPTER III. 



Schlegel, in the introduction to his History of Philosophy, 
says: "There are five essential and eternal elements of human 
society — the family, the school, the guild, the church and 
the state." He further says that these are all that are 
essential. It can he seen at a glance that if the family, 
which is at the base of all the interests of society, and 
grows out of the strongest affection in man, be Avell regu- 
lated according to the law of the family; if the school, 
comprehending all intellectual development and moral 
training, be well conducted; if the guild, embracing all 
financial and commercial transactions, is upon a substan- 
tial and reliable basis; if the church, by sound doctrine, 
and pure precept, keep the public conscience enlightened 
and sensitive ; and if the state resolutely and impartially 
punish all offenders against law and right, so far as to pro- 
tect every one in the enjoyment of inalienable rights; such 
would be a perfectly well regulated state of human society. 
But it can just as readily be seen that a material defect in 
any of these departments will spread confusion through all 
the rest. The evil results of not maintaining the law of 
the family, one man and one woman, a union for life, and 
the care of children to a reasonable ago, have been ex- 
perienced in our late system of slavery, in the temporary 
marriage of the Indians, and in the polygamy of Utah. 

(62) 



chap, in.] THE GUILD, MR. SHERMAN'S SPECIALTY. 63 

Without the family there can be no school, church, or 
state, and without the school no family, guild, church, or 
state. In truth, all are essential to one another. Without 
a well regulated guild none of the others can exist, with 
any degree of perfection, for all depend somewhat upon a 
division of labor and an exchange of values. 

It is a great and all-pervading law of the Creator, that 
"no man liveth unto himself," and that "in the sweat of 
thy face shalt thou eat bread." These laws we must obey, 
whether we will or not. If we would obtain what we need 
to eat Ave must work, either in earning or digesting it; and 
if we would obtain all we need we must work for others. 
Now if the medium of exchange be of doubtful value, or 
variable, at one time up and at another time down, no one 
can be sure that he has what he labored for, and thus dis- 
trust and uncertainty will pervade every department of life. 

Civil commotion of any kind, or a sudden destruction of 
any species of property, such as occurred in our late war, 
or failures in business upon a large scale, will of necessity 
derange relative values, shake the confidence of the public, 
and destroy motives to industry. Such a state of things 
we, as a nation, have had a taste of during and since the 
late war. The difficulties in the way of adjusting these 
disturbances in the national guild, are apparent from the 
number of "rag" and other "babies" that have of late been 
dressed up and offered to the public, as the substitute for a 
fixed and readily determined measure of values. Innu- 
merable specifics have been offered. This shows that either 
from its intrinsic nature, or its environments, the subject is 
an intricate one. It is difficult to harmonize the minds cf 
men in regard to the proper remedy. There is one man in 
this nation that has studied this subject in all its bearings, 
traced it out in its remotest history, and in its application 



64 HON. JOHN SHERMAN. [chap. 

to different periods and nations, and learned the causes of 
the mistakes that have been made in reference to it, and 
the remedies that have been successful. Nor has he been 
satisfied with any proposed remedy, unless it were really 
applicable to the present circumstances and times. That 
man is John Sherman. Finance has been his study, his 
specialty during all his long Congressional life, and to such 
purpose has he studied, and so clearly has he presented it to 
the minds of men, that he has silenced opposition, and 
placed himself as a financier on the highest pinnacle of the 
temple of fame. 

When the dark war-cloud of the rebellion passed away, 
it left the United States in a position very different from 
what it was before. It was nearly as different when it 
came out of the war and when it went in, as the winged 
insect is from the groveling worm of the earth. The 
country had been altogether unconscious of its resources of 
wealth and power. With a debt of only some sixty mill- 
ions, and its bonds below par, how could it fight? The 
thought of spending a million dollars a day was perfectly 
appalling to the people of the United States ; and when this 
debt had been rolling up for fourteen hundred days, at an 
average expenditure of more than three million dollars a 
day, the question might very naturally arise, Who or what 
can help us now ? So appalled was the financial world at 
the abyss of debt into which we were sinking, that at one 
time a dollar of our money was called worth but about 
thirty-nine cents by other nations. Such being our con- 
dition, it is not to be wondered at that foreign nations 
began to think the Grand Republic a failure. 

Then Jay Cooke & Co. were raised up to secure credit at 
home ; Lincoln to hold the helm of State during the tornado 
of rebellion ; Stanton to guide the sinews of war; and Grant, 



ni.] THE GUILD. MEL SHERMAN'S SPECIALTY. 65 

Sherman, Sheridan, and Thomas to fight our battles. But 
after the battle was over, and the jubilee of victory rang 
throughout the nation, the question arose, Who shall devise 
the ways and the means to redeem this immense credit of 
82,700,000,000, thus pledged to save our nation? 

It is sometimes easy to find those who can contract debts, 
but not so to find those possessed of the wisdom and patience 
and perseverance requisite to pay them. So different are 
the circumstances now from what they ever have been that 
few precedents could be found of any real value. An 
Alexander Hamilton could pilot us out of a debt of a 
hundred millions or so that followed the war of the Revolu- 
tion, but who could be found to manage a debt of three 
thousand millions? For this a man of peculiar qualifica- 
tions, as well as a long course of training was required, not 
merely a training in the schools, for no school has been 
able to set an example from which to study the finances of 
this nation at that time. 

Mr. Sherman's first introduction to national politics was 
in 1848, when he went to Philadelphia as a delegate to the 
convention that nominated General Z. Taylor for the Pres- 
idency. At this convention Mr. Sherman was one of the 
secretaries, and Schuyler Colfax another. What Mr. 
Sherman's political principles were at that time may be 
gathered from a speech made in the Senate of the United 
States, January 28, 1867. The Senate having under con- 
sideration the bill to provide increased revenue from im- 
ports, Mr. Sherman said : 

" Mr. President, before the vote is taken on the amend- 
ment of the Senator from Rhode Island, I think it right 
that I should state the general views which have controlled 
my action as a member of the Committee on Finance, and 
which will control mv vote on this and the various propo- 



G6 HON. JOHN SHERMAN. [chap. 

sitions of amendment that will be submitted to the Senate. 
I listened yesterday, with great pleasure, to the speech 
of my honorable friend from New Jersey (Mr. Catlett), 
and was generally pleased with its tenor and scope. It 
sounded like a good, old-fashioned Whig protective speech — 
the school in which I was educated, the faith in which I 
was taught, and in which I have confidence. But, sir, it 
seems to me that the Senator from New Jersey, in his zeal 
for protection, forgets that we are now legislating under 
peculiar circumstances, and are compelled to look at a 
state of facts far different from those that existed before 
the war. 

"In considering so complicated a subject as a tariff, 
nothing can be more deceptive than the application of such 
general phrases as a ' protective tariff.' Every law pro- 
posing a duty on imported goods is necessarily a restraint 
on trade. It imposes a burden upon the purchase and sale 
of Imported goods, and tends to prevent their importation. 
The expression a ' free trade tariff' involves an absurdity. 
Free trade implies a trade without restriction, while any 
tariff is a restriction on trade." 

Mr. Sherman's advent into political life occurred at an 
important juncture in the history of the old Whig high 
protective tariff doctrine. Up to this time a protective 
tariff had been regarded as a settled principle of govern- 
ment, as unalterable as ' ' the laws of the Medes and 
Persians." But General Taylor, who, the Mexicans said, 
"did not know when he was whipped" (and he certainly 
never intended to find out), in his letter of acceptance of 
the nomination of the Presidency, taught the Whigs that 
protection is not a principle, and should not be so regarded, 
but simply a measure of expediency, and temporary in its 
character. This view was adopted as a new departure by 



in.] THE GUILD, MR. SHERMAN'S SPECIALTY. 67 

the Whigs. The writer, at that time, conversed with the 
Hon. Thomas Ewing, of this State, and Ex-Governor Les- 
lie Combs, of Kentucky, both of whom approved of this 
view, and wondered they had not seen it before. They 
perceived that a protective tariff should be resorted to sim- 
ply and only to develop the capabilities of the nation, upon 
the principle that a man might spend on his farm this year 
more than he produces, in order to produce much more 
than he expends next year. But when once that point is 
reached, the cheaper production will protect itself. Such 
is the result of protection in past years. Now, American 
manufactures and productions can compete with all, for 
the best markets in the world. This modified doctrine of 
protection came into vogue the very year in which Mr. 
Sherman entered politics. In the speech already quoted 
from, this thoroughly common-sense view of a tariff stands 
out in bold relief. Mr. Sherman proceeds to say : 

"The first tariff act, passed soon after the foundation of 
the Constitution, was called a ' protective tariff.' One of 
its leading objects, as declared by Washington, was to fos- 
ter and protect American manufacturers, and yet the gen- 
eral rate of duties was but ten per cent, ad valorem. On 
the other hand, the tariff of 1846 is commonly known as a 
' free trade tariff,' and yet the rate of duty levied by it av- 
eraged twenty-four and a half per cent. Every duty on 
imported merchandise gives to the domestic manufacturer 
an advantage equal to the duty, and to that extent every 
tariff is a protective tariff. When the duty is so high as 
to prevent importation, it ceases to be a ' tariff/ and be- 
comes a ' commercial regulation.' So the general term a 
' revenue tariff,' as descriptive of a tariff, is deceptive, and is 
simply tautology. Every tariff bill is a ' revenue tariff.' 
The word ' tariff' implies revenue, and means a rate of tax- 



68 HON. JOHN SHERMAN. [chap 

ation on imported goods. It is simply a mode of taxation 
adopted by all commercial nations as the most certain, con- 
venient, and least expensive form of taxation. The com- 
mon meaning attached to the phrase 'revenue tariff' is a 
general ad valorem tax on imported goods, without regard 
to domestic manufacture. Such a tariff has never existed 
in any commercial country, least of all in Great Britain, 
where the duties are carefully levied to encourage their 
own manufactures. They do not now levy duties on man- 
ufactures, for the same reason that we do not on anthracite 
coal. By a vast accumulation of capital, and by severe 
commercial restriction, maintained for one hundred years, 
they have a substantial monopoty of certain important 
branches of industry. They do not levy duty on such 
goods, because none are imported into Great Britain, and 
the tariff on them would produce as little revenue as your 
duty on anthracite coal." 

Here is presented, in concrete, a full commentary on the 
Whig doctrine of 1848: "Lay a tariff when it will be ben- 
eficial, and abolish it when it ceases to be so." The above 
was said in 1867. Of course, the necessities that grew out 
of the war caused an adjournment, sine die, of the question 
of a protective tariff purely, and rendered necessary a 
tariff for revenue, and, if for revenue, it must incidentally 
"protect," unless laid upon articles such as we can not 
produce. 

While Mr. Sherman's study and thought during his 
whole course in Congress was the protection of the national 
guild, and caused him, as soon as he entered the Senate, 
to be placed on the Finance Committee, yet, when the 
blast of war sounded, it stirred his patriotic heart to the 
very core. The following account will show how this feel- 
ing showed it>elf, and how near he came missing the call- 



in.] THE GUILD. MR. SHERMAN'S SPECIALTY. 09 

ing for which Providence had certainly raised him up. 
Courage was not wanting, for we shall follow him through 
one event that required a higher order of courage than is 
commonly called for on the field of battle. 

After the proclamation of President Lincoln, Colonel 
McLaughlin's company of cavalry was raised in Mansfield, 
and the first and second regiments were rapidly formed, or- 
ganized and dispatched to the East. Senator Sherman 
met them at Harrisburg, and remained with them until 
the meeting of the. Senate, on the Fourth of July. They 
were drilled and disciplined at Philadelphia, and thence 
proceeded, by way of Harrisburg to Hagerstown and the 
line of the Potomac. Early in these movements Mr. Sher- 
man tendered his services to General Patterson, who was 
placed in command of the forces gathering in Pennsylva- 
nia, and was appointed by him volunteer aid, and served 
in that capacity until required to attend the session of the 
Senate, when he resigned. He was at Washington during 
the battle of Bull Pun, and, on the adjournment of Con- 
gress, went home, strongly impressed with the importance 
of entering the military service himself, and inducing others 
to do so. 

As a large number of regiments were then being organ- 
ized, he formed the purpose to recruit, arm, and equip a 
brigade at Mansfield, but postponed it until the day after 
the fall election. 

Mr. Sherman, then in connection with General R. 
Brinkerhoff, whose valuable services he first secured to as- 
sist him, organized the Sherman Brigade. General Brink- 
erhoff took the laborious and responsible position of quar- 
termaster, one of the most important offices in recruiting a 
force, and remained with it, rendering efficient service for 
five years. 



70 HON. JOHN SHERMAN. [chap. hi. 

By the 1st of December, Mr. Sherman had at Camp 
Buckingham, in Mansfield, two regiments of infantry, one 
battery of artillery, and one squadron of cavalry, com- 
pletely officered, armed, and equipped. He then returned 
to Washington, leaving this force under the command of 
General Kobert S. Granger, intending, at some subsequent 
time, to join them. But, upon his arrival at Washington, 
he was dissuaded from his purpose of resigning his seat in 
the Senate, not only by several Senators, but by President 
Lincoln and Secretary Chase, personally. Mr. Sherman 
was, at that time, a member of the Finance Committee of 
the Senate, and it became apparent that the struggle was 
to be one, not only of arms, but of the sinews of war; and 
he at once, in connection with Mr. Fessenden, devoted 
himself almost exclusively to questions of taxation and cur- 
rency, and in which, from the first, he took the very 
active part, which this whole narrative will abundantly 
show. In this way the General was lost, but the Financier 



CHAPTER IV. 

mr. Sherman's election to congress. 

As was mentioned in an earlier part of this work, Mr. 
Sherman's taste was for political life. We leave him here 
as a plodding lawyer, for nearly a decade. There was 
not the least prospect of his ever being elected to the 
slightest office. He had no hope of it himself. This 
county and all surrounding counties were hopelessly Dem- 
ocratic, and he was incorrigibly Whig. So that the idea 
of political preferment was not entertained by him. 

In 1854 the slave-holding South had so far encroached 
upon the freedom-loving North, and in May of that year 
took so decisive a step towards revolutionizing the whole 
North, that even Democratic old Richland waked up and 
determined to bear it no longer. It will be borne in mind 
that in 1850, what was called the fugitive slave law had 
been passed, which forbade the harboring of slaves or feed- 
ing them ; and, moreover, put it in the power of the mar- 
shal to call upon citizens to aid in recapturing them. 
Heavy penalties were imposed for refusing to aid in their 
recapture, or for assisting them to escape. This was 
really a Whig measure, and was in the main sustained by 
the Whigs. But it sat heavily on the conscience of both 
political parties. Many of the Democrats bolted, and 
formed what was called the Free Soil party. These and 
the disaffected Whigs coalesced, and afterwards formed the 

(71) 



72 HON. JOHN SHERMAK. [chap. 

Republican party. As yet, however, it was weak. But 
another step was taken by the imperious South, that at 
once aroused the spirit and patriotism of the Whigs almost 
universally, and secured a large accession from the Demo- 
crats to the Free Soil party. The North had rested in 
comparative quietness respecting the extension of slavery, 
because it was thought slavery could not be carried North 
of latitude 36° 30', agreeably to the Missouri Compromise, 
made at the admission of that State to the Union in 1820. 
Missouri was admitted on this condition, and without it, 
could not have been admitted as a slave-holding State. It 
was supposed by the whole North that such a compact or 
compromise was inviolable. The faith of the whole South 
was pledged to observe it, and the existence of Missouri 
was a token and monument of that pledge. One was sup- 
posed to be as irrepealable as the other. 

This being so, slavery being limited to the territory 
south of 36° 30', and the territory on that side of the line 
being much less in extent than that in the North, Free 
State politicians felt comparatively easy as to the result. 
The slave power would soon be overwhelmed by the pre- 
ponderance of the free Northern States. But the very 
considerations that quieted the North aroused the appre- 
hensions of the South. Slaves were rapidly increasing, 
(doubling in about twenty-eight years) the soil in the old 
slave States becoming worn out by hard usage, and new 
territory open to slavery becoming rapidly diminished, 
slave property was likely to become impaired in value, and 
the political power of slave States to fade away. Some- 
thing must be done to arrest this tendency or the slave 
power is doomed. So both sides felt. The one was ani- 
mated with hope and the other was stung with apprehen- 
sion. 



iv.] MR. SHERMAN'S ELECTION TO CONGRESS. 73 

The feeling North and South from 1850 to 1854 was 
very much as it is now between 1876 and 1880. The con- 
flict then was very analogous to what it is now. The South 
politically in the ascendency, and using their power, as the 
slave-holder did the lash — keeping covenant while conven- 
ient, violating it if interest required — very much as they 
do now. 

After enacting the fugitive slave law in? 1850, the Whigs, 
as a party, were disposed faithfully to observe its condi- 
tions, and the courts enforced them with almost merciless 
severity. But the South required more than this. It was 
not easy to catch slaves against the consciences of the free. 
Many in the North were in a most trying position, as to 
whether duty required them to assist the slaves to gain 
their freedom or to submit to the "powers that be," and 
obey the law. Some would talk one way and argue, but 
act the other way. The following is a fair example of the 
way the fugitive slave law was observed in Ohio: 

In Circleville was what was understood to be a station 
on the underground railroad — t. e. t the line for the escape 
of slaves from the South. Joseph Dodridge, Esq., one of 
the nobles of the earth, who feared God rather than man, 
was understood to be the station-master — i. e., the man to 
call on for help when fugitives arrived in the vicinity. He 
had a neighbor who was an ardent supporter of the consti- 
tutional guaranty that the rights of slave-holders should 
be respected. One day word was brought to Mr. Dodridge 
that a colored passenger wanted his ticket. "The message 
was overheard by his pro-slavery neighbor, and both re- 
paired to the depot — i. e., a retired spot in the forest. The 
negro saw the two white men, and kept dark, waiting for 
the countersign. Mr. Dodridge kept concealed for fear of 
being arrested by his neighbor. Both skulked for a while. 



74 HON. JOHN SHERMAN. [char 

Finally Mr. Dod ridge came out and said to his pro-slavery 

neighbor, " What are you here for?" Said he, " What are 
you here for?" "To feed this colored man," said Mr. 
Dodridge. "So am I," said the other. So it was often 
that the impulses of humanity and the Savior's golden rule 
overcame constitutional scruples, and the negro was helped 
on his way to the free North. 

But the history of slavery in this country has taught 
statesmen one grand lesson, viz: that the conscience of the 
nation can not be long stifled by legislative compromises. 
The only safe rule is: " Juditia fiat , mat coelum." The peo- 
ple of the Southern States would better understand it 
now than to learn it later by bitter experience, that the 
colored man must and will have his rights and the rewards 
of his labor. 

Still it may be in this, as it was in 1854, that the evil 
is to be cured by its own development. This is a widely 
pervading law of Divine Providence. Says Kurtz: "The 
development of evil is its cure " Slave-holders could not 
be satisfied that their "domestic institution " should be 
restricted to its present limits, and the national conscience 
was not willing it should be extended. But " the iniquity 
of the Amorites was not yet full." The slave power was 
in the ascendency, and demanded a wider field. 

By the Missouri Compromise it was provided "that in 
all the territory ceded by France to the United States 
under the name of Louisiana, north of 36° 30', excepting 
only such part thereof as is included within the limits of 
the State (Missouri) contemplated by this act, slavery and 
involuntary servitude, otherwise than in the punishment 
of crime, whereof the parties shall have been duly con- 
victed, shall be and is hereby forever prohibited." When 
the question came up for the organization of a territorial 



iv.] MR. SHERMAN'S ELECTION TO CONGRESS. 75 

government for Kansas, the politicians were very adroit, 
and put Nebraska with it, saying, Kansas will become a 
slave State, and Nebraska a free State, still preserving the 
same relative strength, North and South, as heretofore. 
But the conscience of the North could not consent that 
slavery should be extended at all ; and the rapacity of the 
South began to demand that it should not be limited at all. 
The North had the advantage in argument (as the right 
generally has). The Missouri Compromise did not say 
there should be no free States south of 36° 30', but did say 
there should be no slave States north of that line. This, 
Southern politicians said, is not equal. It restricts slavery, 
but not freedom. Repeal the Missouri Compromise, and 
then both are upon an equality. What! exclaims the 
united North. Repeal that Compromise ! Never. It is a 
contract, and must stand forever. The word forever is a 
part of it, and the admission of Missouri into the Union, 
another part of it, and that can not be repealed, nor can 
this be rightly done. But the then majority in Congress 
(May, 1854) said it shall be repealed in these words. In 
section fourteen of the act then passed, organizing the 
territories of Kansas and Nebraska, it was declared that 
the Constitution and all the laws of the United States 
should be in force in those territories, except the Missouri 
Compromise act of 1820, " which is hereby declared in- 
operative and void." This showed at once the fallacy of all 
national compromises, and did, in the minds and actions of 
many, annul the effect of the fugitive slave law. It 
demonstrated that the South can be trusted just as far as 
interest goes, and no farther. 

While the slave power was thus persistently active, the 
free North was not wholly idle. About a month before 
this act was repealed, the Legislature of Massachusetts had 



7G HON. JOHN SHERMAN. [chap. 

incorporated the Massachusetts Emigrant Aid Company, 
for the purpose of assisting emigrants to settle in the new 
territories, by giving them useful information, procuring 
them cheap passage over railroads, and by establishing 
mills and other conveniences, at central points in the new 
settlements. In July the Legislature of Connecticut 
granted a charter to a similar company. A large emigra- 
tion into Kansas, from the north-western States, had 
already taken place, and emigrants, in considerable num- 
bers, from the free States, and a few from the slave States, 
now availed themselves of the opportunities of cheap trans- 
portation offered by these companies, to settle in Kansas. 
It had been argued in favor of repealing the compromise — 
let the territory be open to all on both sides of the line; 
slave-holders to take their slaves where they pleased, and 
free labor to go where it pleased. It was now the pleasure 
of free labor to emigrate to Kansas. But let us see the 
kind of liberty permitted to the free-soil advocates. On 
July 29th, 1854, a public meeting, called by the "Platte 
County Defensive Association," was held at Weston, Mis- 
souri, and resolutions were adopted declaring that the asso- 
ciation would hold itself in readiness, whenever called upon 
by the citizens of Kansas, " to assist in removing any, and 
all emigrants, who go there under the auspices of Northern 
Emigrant Aid Societies." These resolutions were pub- 
lished, signed by B. F. Stringfellow, Secretary, and G. 
Galloway, President. On August 12th, another meeting 
was held at Weston, at which resolutions were adopted, de- 
claring in favor of the extention of slavery into Kansas. 

From such beginnings as these, the excitement became 
intense all through the country, and revolutionized the 
politics of Richland county, Ohio, and its environs. The 
remarks of Mr. Elliot, of Massachusetts, in Congress, upon 



IV.] MR. SHERMAN'S ELECTION TO CONGRESS. 77 

the Kansas and Nebraska bill, on the 10th of May, 1854, 
were literally true. Mr. Elliot raid : 

"Mr. Chairman, the popular voice has been pronouncing 
judgment on this bill while we have been discussing its 
claims and demerits. It is beginning to be understood that 
the writing will come, and in advance of the record we 
have from every side that truth of history, 'Whom the 
gods would destroy, they first make mad.'" This bill was 
passed in May, and in October John Sherman was elected 
to represent his district, in the Thirty-fourth Congress, 
Which began its first session on the 3d of December, 1855. 

The circumstances that attended Mr. Sherman's election 
to Congress are worthy of being recorded, as showing the 
leadings of Providence, in raising up the man that w T as to 
pilot us through all the mazes of our financial labyrinth. 

The district that elected him was at that time composed 
of Richland, Morrow, Huron, and Erie counties. It was 
so arranged by a Democratic legislature, in order that the 
heavy Democratic majorities of Richland and Morrow 
might overcome the Whig .majorities in Huron and Erie, 
and thus insure a Democratic Representative in Congress. 
The scheme served their purpose the first time, but en- 
trapped its authors the next. So it commonly turns out. 
Whichever party deviates from the right, and plots what is 
wrong, and unfair, is sure, sooner or later, to reap the bitter 
fruits of it. Here, let an old man, who has never taken an 
active part in politics, but as a lover of his country, has 
been an interested looker-on, and a voter, for more than 
fifty years, say to all politicians, there is nothing gained 
in the end, by gerymandering, as it is called. It is a kind 
of plot that sooner or later returns to plague the inventor. 
To gain the desired end, calculations must be made so 
exact that a trifle may turn the scale on the other side. 



78 HON. JOHN SHERMAN. b HAP, 

The safest and best way is to be just and fair. It ought to 
be remembered that God claims the right to govern this 
world, and the United States are a part of it, and the 
selfish schemes of men will never prosper in the end. 

So in this case. At the election in 1852, the first year 
of Mr. Pierce's administration, Mr. Lindsey was elected as 
a thorough-going Democrat from Erie county. He was a 
respectable and an enterprising farmer, but without educa- 
tion, and at his time of life, without the mental capacity 
and flexibility to acquire one. He also lacked the shrewd- 
ness and tact necessary to be a scheming politician. Ac- 
cordingly, the Democrats were poorly represented in the 
Thirty-third Congress. 

In 1854, in the stirring times referred to above, when 
the fugitive slave-law had about killed off the Whig party, 
and squatter sovereignty shook the Democratic party, the 
Free-soil party was rising in importance. Mr. Lindsey was 
nominated for a second term, or was seeking the nomina- 
tion ; but not being skilled in political chicanery, while he 
claimed to favor free-soil in public, he wrote a letter that 
he would vote, if elected, with Douglas for the repeal of 
the Missouri Compromise. This killed him as a politician. 

In the opposition were four candidates for the nomina- 
tion— J. M. Root, of Sandusky, and Thomas Ford, Jacob 
Brinkerhoff, and John Sherman, of Mansfield. When 
Ford found he was not likely to get the nomination, he 
exerted himself for Sherman. Morrow county went solid 
for Sherman, and then Richland, with members from Hu- 
ron and Erie, so that he was nominated by the opponents 
of slavery extension, afterwards crystallized into the Repub- 
lican party, at the Pittsburgh Convention of 1856, and tri- 
umphantly elected. 

Mr. Sherman, while bitterly opposed to the extension 



iv.] MR. SHERMAN'S ELECTION TO CONGRESS. 79 

of slavery into any new territory, occupied conservative 
ground, as will be seen by a resolution offered by him on 
the opening of the second session of the Thirty-sixth Con- 
gress. His position came near defeating his election. At 
one time the question was put to him in Huron county 
whether he would vote for the abolition of slavery in the 
District of Columbia. He frankly said, No; he should 
oppose its extension, but not interfere where it is. His 
very frankness disarmed prejudice;, and procured for him 
an almost unanimous vote in that place. Since that, he 
has become opposed to slavery every-where and anywhere. 
In 1855, Mr. Sherman first took his seat in Congress as a 
member of the House of Representatives. This was his 
first introduction to public life, and it occurred amidst 
one of those political storms that preceded the slave-hold- 
ers' war. It will be remembered that in the opening of the 
Thirty-fourth Congress there was a long contest for Speaker. 
The parties were so nearly balanced that there was serious 
difficulty in electing anyone. William A. Richardson, of 
Illinois, and L. D. Campbell, of Ohio, were at first leading 
candidates. After the twenty-third vote, L. D. Campbell 
rose and withdrew. Then the contest was between Rich- 
ardson and N. P. Banks, Jr., and proceeded to the one 
hundred and twenty-ninth ballot, on February 1st, when a 
plurality resolution was passed, as follows: "Mr. Samuel 
A. Smith, of Virginia, submitted the following resolution, 
viz : Resolved, That the House will proceed immediately to 
the election of a Speaker, viva voce. If, after the roll shall 
have been called three times, no member shall have re- 
ceived a majority of all the votes cast, the roll shall again 
be called, and the member who shall then receive the 
largest number of votes, provided it be a majority of a 
quorum, shall be declared duly elected Speaker of the 



80 HON. JOHN SHERMAN. [chap. 

House of Representatives of the Thirty-fourth Con- 
gress." 

This resolution was passed, and on February 2d, " the 
House proceeded to vote the one hundred and thirty-third 
time, viva voce, for Speaker, being the fourth vote under 
the plurality resolution this day adopted." It appeared 
then that N. P. Banks, Jr., had one hundred and three 
votes, out of two hundred and fourteen, and the highest 
number of any one voted for, and was declared elected, 
afterwards by a vote of 156 to 40. After passing a vote 
of thanks to John W. Forney, for presiding over the 
House "during the arduous and protracted contest for 
Speaker, the House adjourned to the following Monday." 
What was Mr. Sherman doing during his first session ? Was 
he idle? Not at all. To learn what he was doing, we have 
only to look at a speech he delivered in the Senate, De- 
cember 17th, 1872, on the subject of the French Spoliation 
Claims. The bill to provide for their adjustment being be- 
fore the Senate, Mr. Sherman said: "Mr. President — My 
acquaintance with the French spoliation bill commenced 
with my entrance into the House of Representatives in the 
winter of 1855-56, when, being a member of the Commit- 
tee on Foreign Affairs, this old and interesting class of 
claims was handed to me for investigation. At that time 
my mind was entirely unbiased upon the subject. The ex- 
amination of the claims opened an interesting portion of 
the American history, and without much to do, I entered 
upon it, reading nearly all the public documents then 
already accumulated in great numbers of volumes. I in- 
formed myself in regard to all the points that had been 
made in the discussions of the question. After this ex- 
amination I became entirely convinced that there was no 
ground, either in law or equity, why these claims ought to 



iv.] MR. SHERMAN'S ELECTION TO CONGRESS. 81 

be paid by the United States. From that time to this, 
they have rested without any definite action, by either 
House of Congress. Now they are pressed with a confi- 
dent expectation of payment, and it becomes my duty, 
without much time for preparation, to give the reasons for 
my conviction why they ought not to be paid." 

Then, after reviewing the case, he proceeds to expose 
the iniquitous scheme, by which it was attempted to extort 
from the Government an acknowledgment of this claim ; 
that an organized agency had been in operation forty-nine 
years for this purpose, and says: " All these are consider- 
ations which ought not to prevent us from paying this ob- 
ligation, if it is just and honest. If it is right in law and 
equity that the United States should pay it, I do not object 
to the means by which it is urged upon Congress, nor to 
the lapse of time." He then presents the reasons why 
these claims should not be paid, on the ground of equity, 
by the laws of war, and international obligations. 

This is introduced here to show— 1. How Mr. Sherman 
was employing himself during his first session in Congress; 
that he was a faithful and industrious student. 2. How thor- 
oughly his memory served him. Here was an intricate 
question examined by him in 1855-56, that did not come 
up till sixteen years afterwards for discussion, and his 
memory served his purpose. 3. How terse and forcible 
his arguments are. In the second paragraph are no less 
than six arguments, and in the next three more, before he 
intimates to us that he is arguing at all. 4. It would ap- 
pear that this discussion of the spoliation claims was the 
last of them, just as his discussion of a protective tariff in 
1867 settled that for all time. 

But Mr. Sherman was not permitted to devote all this 
stormy Congress to the study of old questions. He was 



82 HON. JOHN SHERMAN. [chap. 

put in the front rank of what came near being the great 
fight of the age, and was in truth its beginning. On the 
19th of May, 1856, it was "Besolved, That a committee 
of three members of this House, to be appointed by the 
Speaker, shall proceed to inquire into and collect evidence 
in regard to the troubles in Kansas generally, and partic- 
ularly with reference to any fraud or force attempted or 
practiced in reference to any elections which have taken 
place in said territory, either under the law organizing 
said territory, or under any pretended law which may be 
alleged to have taken effect therein since." To show the 
hazard in which that committee might be placed, it was 
" Besolved further, That the President of the United States 
be, and is hereby requested to furnish to said committee, 
should they be met with any serious opposition by bodies 
of lawless men, in the discharge of their duties aforesaid, 
such aid from any such military force, as may at the time 
be convenient to them, as may be necessary to remove such 
opposition, and enable said committee, without molestation, 
to proceed with their labor." The committee first ap- 
pointed was composed of Mr. L. D. Campbell, of Ohio ; 
Mr. Wm. A. Howard, of Michigan; and Mr. Mordecai 
Oliver, of Missouri; but Mr. Campbell declined, and Mr. 
John Sherman was put in his place. 

Mr. Sherman was put on this committee because he was 
fresh from the practice of law, and skilled in examining wit- 
nesses and in weighing testimony. Mr. Howard was nom- 
inally the chairman, but being in poor health, and Mr. 
Oliver in the minority, Mr. Sherman had the work to do, 
and the majority report to" make. This he wrote with his 
own hand, and the manuscript is now in Mansfield. 

Here, then, was our Representative, young in years and 
young in legislative experience, thrust into the hottest of 



MR. SHERMAN'S ELECTION TO CONGRESS. 83 



the fight, in the stormiest Congress that had ever met. 
Mr. Sherman performed his part so admirably, with such 
discrimination, intelligence, thoroughness, and courage, as 
to place him ever after among the most prominent defend- 
ers of law and liberty. The majority report in part was • 
" Every election has been controlled, not by actual settlers, 
but by citizens of Missouri, and. as a consequence, every 
officer in the territory, from constable to legislator, ex- 
cept those appointed by the President, owes his position 
to non-resident voters. None have been elected by the 
settlers ; and your committee have been unable to find that 
any political power whatever has been exercised by the 
people." Hence the majority of that committee were per- 
sons against whom the bitterest hostility of the South was 
to be expected. But the election of a Speaker was not the 
end of the trouble for this session. It was only the begin- 
ning. The balance of parties, Republican and Democrat, 
was so nearly even, that a Speaker could, not be elected 
otherwise than by a plurality vote. There were more un- 
yielding Whigs than straight-out pro-slavery men, but not 
enough to carry an election in the House over the South 
and all. A few extracts from the journal of the House of 
Representatives of the Thirty-fourth Congress will show the 
spirit that prevailed. 

On page 368, part I, is a message from the President of 
the United States to the following effect, which was ordered 
to be read by a vote of 108 to 87 : 

"To the Senate and House of Representatives ."—Circum- 
stances have occurred to disturb the course of governmental 
organization in the territory of Kansas, and produce there 
a condition of things which renders it incumbent on me to 
call your attention to the subject, and urgently recommend 
the adoption by you of such measures of legislation as the 



S4 HON. JOHN SHERMAtf. [chap, 

grave exigencies of the case appear to require. Its out- 
lines are as follows: — 'The act to organize the territories of 
Kansas and Nebraska, allowing the people to organize their 
own domestic affairs without regard to the Missouri Com- 
promise; and that every free white male resident, twenty - 
one years of age should be a voter," Nebraska organized 
peacefully under this, but in Kansas there was a conflict 
between the free North and slave-holding South, and to put 
an end to this conflict or allow the people to fight it out 
among themselves he recommends the admission of Kansas 
into the Union. 

On the 19th of May, 1856, Mr. Galloway read the fol- 
lowing resolutions: "That the President of the United 
States be requested to inform the House, whether he has 
any information, official or otherwise, of the murder of 
three American citizens (Dow, Barber, and Brown) resid- 
ing in the territory of Kansas ; whether any legal steps 
have been taken by the United States district attorney, or 
any other officer, for the legal investigation thereof, and 
the prosecution of the murderers ; also, whether he has any 
information in regard to the forcible abduction of Wm. 
Phillips, an American citizen, residing in the territory of 
Kansas, and of his being carried across to the State of 
Missouri, and there tarred and feathered ; and whether 
any steps have been taken by the officers of the United 
States in that territory, for the prosecution of the persons 
engaged in such outrages; also, whether he has any in- 
formation in regard to the tarring and feathering, at the 
town of Atchison, in said territory, on the 30th of April 
last, of the Rev. Pardee Butler, a Methodist minister, and 
a citizen of the United States, residing in said territory of 
Kansas, and whether any steps have been taken, by the 
United States officers in that territory, for the prosecution 



iv.] MR. SHERMAN'S ELECTION TO CONGRESS. 85 

of persons engaged in said outrage; also, whether he has 
any information in regard to the shooting of a Mr. Mace, 
with attempt to kill, after he had given testimony before 
the investigating commission of this House ; also, whether 
he has any information in regard to the murderer or mur- 
derers of Sheriff' Jones." 

These being allusions to facts well established as hav- 
ing occurred, and but a small part of what actually did 
occur. 

But the murderous spirit that trampled down political 
rights, and with bowre-knife and rifle attempted to force 
slavery upon the fair fields of Kansas, found its counter- 
part in the capitol of the nation. Senator Sumner was 
brutally knocked down on the floor of the Senate and 
beaten till he was senseless, with a cane, by Preston S. 
Brooks, for an unanswerable argument made by him 
against slavery, and the House asserted its right to punish 
the perpetrator. Lawrence M. Keitt, of South Carolina, 
was also reprimanded for watching and seeing it done. 
He resigned, but was re-elected and came back. An- 
other member was reprimanded for killing a servant at 
a hotel. 

August 18th, Mr. Simmons submitted another resolu- 
tion, which was read, considered and agreed to, viz: "to 
appoint a committee to investigate the alleged assault of 
Fayette McMullen, of Virginia, on Amos P. Granger, of 
New York." At one time the whole House came near get- 
ting into a fight, and probably the Southern members 
would have seceded and begun the war of the rebellion 
five years sooner, but Barkdnle's wig came off, and set the 
whole House into a roar of laughter, which destroyed the 
appetite for fighting. 

The first session of the Thirty -fourth Congress adjourned 



86 HON ; JOHN SHERMAN. [-hap. 

on the 18th of August, and President Pierce called a 
meeting on the 21st of the same month, in extra session. 
The reason of this call was the failure to make appropria- 
tions for the army. The cause of said failure was this: 
The Senate had passed the bill in the usual form. The 
House attached a rider, that no part of the appropriation 
should be used for a certain purpose in Kansas. To this 
rider the Senate objected, and the bill failed. 

There was a wide difference between the rider proposed 
by the Republicans in 1856, and that proposed by the 
Democrats, causing an extra session in 1879. In 1856 the 
proposed rider was, that none of the money should be used 
to enforce laws passed for Kansas, by the inhabitants, until 
they were declared to be laws, either by the General Govern- 
ment, or by Kansas itself. In 1871) the rider was to pro- 
hibit the use of the army, and to appoint marshals to 
enforce United States laws. The former rider, in the shape 
of a proviso, was to prohibit the use of the army for an, 
unlawful purpose, and the latter for a lawful. The former 
asserted the power of Congress over the matter in question ; 
the latter denied it. 

The House adhered to its proviso from August 21st to 
August 30th, but the Senate was firm. 

Mr. Sherman was once put on a committee of confer- 
ence, but the pro-slavery interest in the Senate was too 
strong to be moved. At last the House yielded— backed 
down — as the North ever did before the war. But in the 
final vote Mr. Sherman is recorded in the negative. Any 
one who knows the Secretary, the strength of his will, and 
his loyalty to truth and right, after all he had seen and 
heard in Kansas, would understand that he could never 
have voted to strike out this amendment, viz: "That no 
part of the military force of the United States, for the sup-' 

v 



iv.] MR. SHERMAN'S ELECTION TO CONGRESS. 87 

port of which appropriations are made by this act, shall 
be employed in aid of the enforcement of any enactment 
heretofore passed, of the bodies claiming to be the Territo- 
rial Legislature of Kansas." 



CHAPTER V. 

MR. SHERMAN IN THE THIRTY -FIFTH CONGRESS. 

In looking through the Congressional Globe it will be 
seen that up to the 28th of January, 1858, Mr. Sherman 
was on the floor eighteen times, and each time to rectify 
some disorder in the mode of doing business, or to correct 
something that was likely to go wrong, so watchful was he 
of our national finances. On the 28th he obtained the 
floor and proceeded to address the House upon the affairs 
of Kansas. This was a subject that he had thoroughly 
studied and knew whereof he spoke : 

"Mr. Chairman, it is with some reluctance that I rise 
to speak, to a question not now directly before the House. 
But, sir, I know that the Lecompton Constitution will 
soon be presented, and that an earnest effort will be made 
to admit Kansas into the Union under it, I avail myself, 
for the first time, of the laxity of the rules in the com- 
mittee, to state my opinion on that subject. Another 
reason why I engage in this debate is, that I have received 
from the Governor of Ohio, the resolution of the Legisla- 
ture of that State, requesting me; as one of the Represen- 
tatives, ' to vote against the admission of Kansas into the 
Union under the Lecompton or any other constitution that 
has not proceeded from the people, by a clear delegation 
of power to adopt the constitution, without a further sane- 



CHAP, v.] IN THE THIRTY-FIFTH CONGRESS. 89 

tion of the people, or which has not been submitted to and 
approved by the people.' 

" This request is entirely consistent with my sense of 
duty, with the wishes of the Republican party, and the 

general sentiment of the people of my native State 

There have been so many irritating incidents connected 
with Kansas, from its organization as a territory, that it is 
difficult to discuss any question relating to it with* due 
moderation and temper. We have been compelled as leg- 
islators, again and again, to examine the disgraceful events 
which compose its history. Though these were for a time 
disputed, few among us would risk their reputation by do- 
ing so now. The irritation of the past is increased rather 
than diminished by the application now made to admit 
Kansas into the Union as a slave State, against the recent 
vote and known will of a large majority of her people." 

Mr. Sherman then proceeds to review at length the his- 
tory of " bleeding Kansas" as he found it in 1856, and as 
it still continued to be, and concluded with the following 
solemn warning (which will suit very well for these times), 
evincing the determined spirit that has come down through 
seven generations of the Shermans, and six of the Stod- 
dard s: 

"In conclusion, allow me to impress the South with two 
important warnings she has received in her struggle for 
Kansas. One is, that though her able and disciplined lead- 
ers on this floor, aided by executive patronage, may give 
her the power to overthrow legislative compacts, yet, while 
the sturdy integrity of Northern masses stands in her way, 
she can gain no practical advantage by her well-laid 
schemes. The other is, that while she may indulge, with 
impunity, the spirit of filibusterism, or lawless and violent 
adventure, upon a feeble and distracted people in Mexico 



HO HON. .JOHN SHERMAN. [chap. 

and Central America, she must not come in contact with 
that cool and determined courage and resolution which 
form the striking characteristics of the Anglo-Saxon race. 
In such a contest, her hasty and impetuous violence may 
succeed for a time, but the victory will be short-lived and 
transient, and leave nothing but bitterness behind. Let 
us not war with each other, but with the grasp of fellow- 
ship and friendship, regarding to the full extent each 
other's rights, and kind to each other's faults, let us go 
hand in hand in securing to every portion of our people 
their constitutional rights." 

Mr. Sherman's end and aim are, both in speech and 
action, to secure what is right first, then what is best and 
safest. This able and fearless speech gave him a high 
rank as a legislator. 

On the first of March, Mr. Sherman offered a resolution 
to ascertain " if any money had been paid out during the 
previous year for the expenses of any legislature, or alleged 
legislature of Kansas; and if so, by what authority." He 
began even then to keep an eye upon the funds, to see 
where they went to, and what became of them. 

Mr. Sherman made several unsuccessful efforts to have 
a committee appointed to provide for taking the census of 
1860. There was quite a disposition to stave it off. "It 
was put over at the last census," said the Speaker. "Yes, 
sir," said Mr. Sherman, " and not only that, but I under- 
stood, by the delay in passing that bill, the Government 
lost nearly half a million of dollars. It is merely to save 
expense that I now propose to introduce this proposition." 
Finance again. 

Here is another instance of Mr. Sherman's love of order. 
A bill Avas proposed to relieve an officer who was in a state 
of quasi suspension, because of a deficiency in his accounts. 



v.] IN THE THIRTY-FIFTH CONGRESS. 91 

Mr. Sherman said : " I insist on my motion, that the bill be 
referred to a Committee of the Whole House. I have no 
particular objection to the bill, but if we permit bills to be 
put upon their passage, as soon as reported, we shall in- 
volve ourselves in difficulty." Again Mr. Sherman objects 
to the irregularity of committees having their reports 
printed before they are authorized to do so. 

On the 15th of May, 1858, is an incident showing the 
watchfulness of Mr. Sherman over the Treasury, which 
may have suggested to him the necessity of the great work 
of this Congress upon which he afterwards entered. It 
appears to have become customary to pay some of the 
clerks of pursers in the navy-yards fifty per cent, more 
than the salary allowed by law. A proposition was made 
to legalize it. 

Mr. Sherman. — "I understand the effect of this 
amendment to be to raise the salaries of these clerks from 
$500 to $750." 

Mr. Millsox. — "The effect is to continue their salaries 
as they have received them since 1854." 

Mr. Sherman. — "But which they have received in 
violation of law. I am willing that they should not be 
compelled to refund what they have received. I under- 
stand that the department decided that this $250 should 
be paid them, and I am not willing they should suffer for 
the mistakes of the department, but I want the salary to 
remain in the future at 8500." 

It will always bo seen, by looking through the Congres- 
sional Globe, that there was in him a kind of instinct or 
habit, principle or disposition, whatever it may lie called, 
to watch the smallest leak in the Treasury. With him 
every thing must be according to law. This can not be 
attributed to any selfish or political motive; for being in the 



92 HON. JOHN SHERMAN. [chap. 

minority he would not regard himself or his party as par- 
ticularly responsible for illegal expenditures. But his de- 
termination was, that whatever is right should be done, and 
whatever is wrong should not be done. 

On the 6th of April a bill was before the House to 
supply deficiencies in the appropriations: 

Mr. Sherman. — "Mr. Chairman, I am not disposed to 
cavil at appropriations demanded by the necessities of the 
country. I think it is the duty of Congress, however, 
carefully to guard their appropriations from misapplication, 
and limit them strictly to the necessary expenses of the 
Government. In my judgment our Government has de- 
parted from its original policy in the appropriation of money 
more than in any thing else. And one objection I have 
to this side of the House, as a political party, is that we 
have been too free in the expenditure of money." [Mr. 
Sherman lectures friends as well as foes.] " \Ve have 
yielded too much to the demands of the Administration. 
We were at fault, I think, in the last Congress, in not 
watching more carefully and restricting the expenditure of 
the Government." 

Notice, again, Mr. Sherman's demand for order and regu- 
larity, and intelligence in appropriations. He says: "It 
is idle to look on the face of the bill for information. I 
find that in one clause of the bill they have included all 
sorts of items — for transportation of the army, including 
baggage; for sailing-vessels on the Gulf of Mexico, and 
upon the Atlantic and Pacific; for procuring water, etc. 
They have included, I do not know how many items ; but 
they have lumped them all together, and appropriated for 
them $5,400,000. Now, I want to know the amount of 
each item. According to the original policy of the Govern- 
ment, the amount of each item was given in such bills as 



v.J IN THE THIRTY-FIFTH CONGRESS 93 

this." — "Now sir, a few words in reference to the third sec- 
tion of this bill. This third section appropriates money in 
accordance with resolutions of the last Congress, which, in my 
opinion, were contrary to law. I believe the last House of 
Representatives, in voting extra pay to its various officers, 
violated an act of Congress. I believe that these resolu- 
tions, passed at the heel of the last session, have not the 
authority of law, and are wrong in principle, and, there- 
fore, I will no more vote to sanction what I regard as a 
breach of law, by either House of Congress, than I will 
vote to sanction a breach of law by executive officers. This 
House has no power to appropriate money except from its 
contingent fund. It has no power to say that any man 
shall have extra pay. There is a law of Congress which 
expressly forbids it, and, therefore, I do not consider 
myself bound to vote for it. I know it is said these 
men are worthy officers; I admit it. At the same time, 
I think all these claims should be passed in the ordinary 
way." 

On the 9th of June, Mr. Sherman said, on the naval 
appropriation bill: "Now, it seems to me that when the 
treasury is bankrupt, it is a bad time to appropriate 850,000 
to fill up ground which, in the opinion of many gentlemen 
connected with the Brooklyn Navy-yard, is totally unneces- 
sary." 

On the Gth of June, 1859, an appropriation bill being 
under consideration, Mr. Sherman said: "The explanation 
of the gentleman is not satisfactory to me. He may have 
given good reasons why the House, at the last session, 
should have appropriated this 8111,000 for the purpose 
named in the bill, but it' any Indian agent in Oregon has 
used that sum, or any other sum of money, for the purposes 
named in this bill, without authority of law, he did what 



94 HON. JOHN SHERMAN. [chap. 

he should not have done, whatever might have been the 
consequence.-. 

" It is proposed to legalize what the gentleman presumes 
has been done. The appropriation is based upon the idea 
that the agent, in Oregon has incurred a liability. How 
incurred a liability? He had no right to incur it, He 
had no right to incur a dollar of expense until Congress 
had appropriated the money by law; and I desire to 
say, that I will make a point whenever I can, in order 
to put a stop to the assumption of power not authorized 
by law. 

"If you pass this bill, inserting this proviso, you will 
indorse a clear violation of law. I do not desire to make 
the point, as to the amount expended for these Indians, but 
that money shall not be expended in violation of law, and 
in defiance of appropriations." 

Mr. Sherman, in the Thirty-fifth Congress, the first two 
years of Buchanan's Presidency, was situated, in one re- 
spect, at a great disadvantage, as it did not fully indicate 
his ability as a legislator and a financier. In another re- 
spect, he was favorably situated for learning thoroughly 
the lessons he was afterward to reduce to practice. He 
had shown, in the investigation of the abuses in Kansas, 
an ability to ferret out political corruption and wrong-do- 
in £, and search them to the bottom. In the speech that 
he made in Committee of the Whole, on the 6th of Jan- 
uary, 1858, quoted above, in part, he showed that there 
was no foe, in or out of Congress, that he was afraid to 
meet. He took the well-ascertained and indisputable facts 
he had learned in Kansas, and so logically and forcibly 
were they arranged, and fearlessly presented, and yet so 
courteously and kindly, that no offense could be taken. On 
this account it was thought discreet for the opposition to 



v.] IX THE THIRTY-FIFTH COXGRESS. 95 

have as little as might be to do with the young man from 
Ohio. 

Nor was he less keen to detect than he was fearless to 
condemn wrong-doing, and resolute to expose it, whether 
in his oWn or the opposite party, as the above notes of his 
remarks and extracts from his speeches abundantly show. 
From the quotations above, as. well as from what we learn 
of his private life, three traits are especially prominent in 
his Congressional life : 

1. Order. Every thing must be in order. If the order 
said a bill must be reported on by a committee, no exi- 
gency could induce him to depart from it. "The fences 
must all be kept up." We shall see the full benefit of this 
trait when we come to find him Chairman of the Commit- 
tee of Ways and Means in the next Congress. 

2. Legal requirements and forms must be obeyed. A 
resolution of Congress can never contravene a law. Every 
official must be paid his salary, and any thing more is in 
violation of law. Money can only be appropriated by Con- 
gress according to law. 

3. Moral rectitude is held in the highest reverence. This, 
in fact, is the order of all his arguments. For or against 
the enactment of laws. Mr. Sherman's first inquiry invariably 
is, whether it be right or not ; next, is it according to law and 
the Constitution ; third, is it in order ; and, last, is it a dic- 
tate of common sense. These were the sentiments that 
prompted every act of his life ; and their fearless advocacy 
caused him to be respected and feared. Nor did he ever 
lose his self-respect, or the respect of others, by any undue 
excitement. When Barkdale's wig was pulled off, it was 
not done by John Sherman. He was always cool and col- 
lected. These qualities secured him an elevated position, 
before the close of his second term in Congress. The dis- 



96 HON. JOHN SHERMAN. [cum-. 

advantage he labored under was, that he was in the minor- 
ity, and because of his ability, he was to be kept as far in 
the background as possible. For this reason, probably, he 
was put down the sixth member of the Committee on Na- 
val Affairs. It might be supposed that this would be about 
the last to be heard of John Sherman during that Con- 
gress; that the other party would be safe from the criti- 
cism of the man who brought back such an "evil report" 
from Kansas. But the Speaker, if such were his inten- 
tions, failed to attain his end. Mr. Sherman not only held 
the majority with bit and bridle, through the two sessions 
of the Thirty-fifth Congress, but in regard to the navy, won 
the greatest laurels. As in the Thirty-fourth Congress, 
his being put on the Committee on Foreign Affairs led 
him so to study the subject of the French Spoliation 
Claims, as afterwards to set it finally at rest, so now the 
study of naval affairs led him so to study that subject as to 
make some discoveries that were so astonishing, as to place 
him very near the crest of a tidal wave of Congressional 
fame. 

The manner in which this was brought about will appear 
from the following record in the Cone/regional Globe, for the 
Thirty-fifth Congress, second session : 

NAVY YARD CHARGES. 

"Mr. Sherman, of Ohio. — Mr. Speaker, I have received 
from D. B. Allen, a citizen of New York, of the highest 
standing and character, a written communication, making 
specific and detailed charges against certain civil officers in 
the navy department, which, if true, would justify impeach- 
ment. I have also received a letter from a member of this 
House, stating that, as a matter of common occurrence, 
certain officers in the Navy-yard, at Brooklyn, have sold 



v.] IN THE THIRTY-FIFTH CONGRESS. 97 

employment and offices in that yard. I have been shown 
affidavits and certificates of workmen which, if true, would 
prove this charge to be well founded. My attention has 
been called to a printed statement in a Philadelphia paper, 
containing somewhat similar charges in regard to the Navy- 
yard at Philadelphia, and to contracts in that city. I, 
therefore, am compelled, by a sense of duty, to ask the 
unanimous consent of the House, to offer the following 
resolution." 

The clerk read the resolution, as follows: "Whereas 
D. B. Allen, a citizen of the State of New York, specifically 
charges that certain officers in the navy department, in 
awarding contracts for the construction of vessels of war 
of the United States, have been guilty of partiality, and of 
violation of law and of public duty; and, whereas, grave 
charges have been made, that money appropriated for 
navy-yards, and for the repair of vessels of the United 
States has been expended for partisan purposes, and not 
for purposes provided by law. Therefore, 

"Resolved, That a committee of live members be ap- 
pointed to examine, 1. Into the specifications and bids for, 
and the terms of the contract for the work and labor done, 
or materials furnished, for the vessels of the United States, 
constructed or in the process of construction or repair by 
the United States, since the fourth day of March, 1857, 
and the mode and manner of awarding such contracts, and 
the inducements and recommendations influencing said 
awards. 2. Into the mode and manner in which, and the 
purpose for which, the money appropriated for the navy- 
and dock-yards, and for the repair and increase of vessels, 
has been expended. That said committee have power to 
send for persons and papers, and have leave to report by 
bill or otherwise." 



98 HON. JOHN SHERMAN. [chap. 

This committee was appointed, and being a select, not the 
standing committee on naval affairs, of which Mr. Bocock, 
of Virginia, was chairman, the Speaker must of necessity 
appoint Mr. Sherman the chairman. Still Mr. Bocock j 
was appointed on this select committee, and other strong 
men in sympathy with the majority of the House. It was 
an immense work and very thoroughly done. -The report 
fills a large volume. The committee was appointed on the 
18th of January and reported on the 24th of February. 
Here is a volume of a thousand pages or more, the material 
of which was collected and all written out, and presented to 
Congress in thirty-six days. That man's work was tre- 
mendous. Mr. Bocock presented the report of the majority 
and Mr. Sherman that of the minority. As this was a case 
in which the party then in power was on trial before the 
country, in order that both sides may be fairly laid before 
the reader, the resolutions accompanying the reports are 
both here inserted. 

The following are the resolutions accompanying the 
report of the majority of the committee, made by Mr. 
Bocock : 

' • Resolved , That the testimony taken in this investigation 
proves the existence of glaring abuses in the Brooklyn 
Navy-yard, and as such require the interposition of legis- 
lative reform ; but it is due to justice to declare that these 
abuses have been slowly and gradually growing up during 
a long course of years, and that no particular administra- 
tion should bear the entire blame therefor. 

" Resolved, That it is disclosed by the testimony in this 
case that the agency for the purchase of Anthracite coal, 
for the use of the navy, has been for some time past, in the 
hands of a person wholly indifferent and grossly incom- 
petent, and that reform is needed in the regulations which 



v.] IN THE THIRTY-FIFTH CONGRESS. 99 

exist on that subject, but there is no proof which traces 
any knowledge of such inefficiency and incompetency to the 
responsible authorities in Washington, nor any which shows 
that the need of reform grows especially out of any act of 
theirs; but it is expressly proven that the supply of coal for 
the naval service has been purchased, during this administra- 
tion, upon terms relatively as favorable as ever heretofore. 

" Resolved, That while we could never sanction or approve 
of any arrangement on the part of an officer of the Govern- 
ment which, under the pretense of making contracts for 
supplies, was designed to confer special and exclusive favor 
on individuals, yet in the contract entered into in Septem- 
ber, 1858, between the navy department and W. C. N. 
Swift, for the supply of live oak to said department, it is 
clearly proven by the testimony that, if the Secretary of 
the Navy did contemplate any favor to the said Swift, he 
did not design to bestow it to the detriment of the Govern- 
ment, but that in all he did in this matter he kept always 
in view the good of the public and the interests of the 
service. 

"Resolved, That in the letting of contracts for the con- 
struction of steam machinery for the vessels of the navy, 
during the present administration, nothing has been shown 
which calls for the interposition of the Congress of the 
United States; but it is manifest that the present head of 
the Navy Department has displayed a very laudable zeal 
to secure the greatest amount of speed and efficiency attain- 
able for said vessels. 

"Resolved, That nothing has been proven in this investi- 
gation which impeaches in any way the personal or official 
integrity of the Secretary of the Navy." 

This report of the majority of that committee was an 
attempt to cover up the disloyalty of an officer of the 



100 HON. JOHN SHERMAN. [chap. 

Government, who was at that very time doing his utmost 
to put the navy in a condition, such that it could not be 
used to prevent the rebellion. 

The following are the resolutions accompanying the re- 
port of the minority of the committee, presented by Mr. 
Sherman, of Ohio : 

"Resolved, That the Secretary of the Navy has, with 
the sanction of the President, abused his discretionary 
power in the selection of a coal agent, and in the purchase 
of fuel for the Government. 

"Resolved, That the contract made by the Secretary of 
the Navy, under the date of September 23, 1858, with 
W. C. N. Swift, for the delivery of live-oak timber, was 
made in violation of law, and in a manner unusual, im- 
proper, and injurious to the public service. 

"Resolved, That the distribution by the Secretary of the 
Navy of the patronage in the Navy-yard at Brooklyn, 
among members of Congress, was destructive of discipline, 
corrupting in its influence, and highly injurious to the pub- 
lic service. 

"Resolved, That the President and Secretary of the 
Navy, by receiving and considering the party relations of 
bidders for contracts with the United States, and the effects 
of awarding contracts upon pending elections, have set an 
example dangerous to the public safety, and deserving the 
reproof of this House. 

"Resolved, That the Secretary of the Navy, in the ap- 
pointment of Daniel B. Martin, chief engineer, as a mem- 
ber of the Board of Engineers, to report upon proposals for 
contracting machinery for the United States, the said Mar- 
tin, at the time, being peculiarly interested in some of 
said proposals, is hereby censured by this House." 

Let the reader pause here and take in a full view of the 



v.] IN THE THIRTY-FIFTH CONGRESS. 101 

majesty of the scene here presented. On the one hand 
was President Buchanan, a Cabinet plotting the destruc- 
tion of the Government if it were likely to be rescued from 
the control of slave-holders, tiie Kansas troubles not yet 
settled, a Congress at the beck and nod of the President, 
and the majority of his own committee ready to smooth 
over the reeking corruptions of those in power, as though it 
were no serious matter for public officials to violate law, 
provided only they do it for the good of the service. 

On the other hand was the young man from Ohio, not 
yet thirty-six years of age, who had waked up the lion of 
the slave-holding interest already in his Kansas investi- 
gation, and the telling speech he made in reference to it in 
the first session of this Congress. Kow r he approaches the 
very magazine of the enemy, and lights a slow match, and 
proclaims President and all guilty. It is not altogether 
unlike Daniel interpreting the handwriting that Elliot, of 
Massachusetts, had said would appear ; nor w T as it alto- 
gether unlike David contending with Goliath. Then, how- 
ever, the future was doubtful, but subsequent events have 
made it clear. But what was the verdict then to be 
pronounced in the near future upon the bold and daring 
exhibition of this corruption in high places? At the assem- 
bling of the next Congress we shall see. Meanwhile our 
future financier must, forsooth, take a lesson from his ex- 
cellency, President Buchanan, and his words are not with- 
out significance. 

In his message, delivered on the 8th of December, 1857, 
the President had said : 

"In the midst of unsurpassed plenty in all the pro- 
ductions of agriculture, and in all the elements of national 
wealth, we find our manufactures suspended, our public 
works retarded, our private enterprises of different kinds 



102 HON. JOHN SHERMAN. [chap. 

abandoned, and thousands of useful laborers thrown out of 
employment, and reduced to want, The revenue of the 
Government, which is chiefly derived from duties on im- 
ports from abroad, has been greatly reduced, while the ap- 
propriations made by Congress, at its last session, for the 
current fiscal year, are very large in amount. It is our 
duty to inquire what has produced such unfortunate re- 
sults, and whether their recurrence can be prevented. In 
all former revulsions, the blame might have been fairly at- 
tributed to a variety of co-operating causes, but not so on 
the present occasion. It is apparent that our existing mis- 
fortunes have proceeded solely from our extravagant and 
vicious system of paper currency and bank credits, ex- 
citing the people to wild speculations and gambling in 
stocks. These revulsions must continue to recur, at suc- 
cessive intervals, so long as the amount of the paper cur- 
rency and bank loans and discounts of the country shall 
be left to the discretion of fourteen hundred irresponsible 
banking institutions, which, from the very law of their nat- 
ure, will consult the interest of their stockholders, rather 
than the public welfare. The framers of the Constitution, 
when they gave to Congress the power ' to coin money and 
to regulate the value thereof,' and prohibited the States 
from coining money, emitting bills of credit, or making 
any thing but gold and silver coin a legal tender in pay- 
ment of debts, supposed they had protected the people 
against the evils of an excessive and irredeemable paper 
currency. They are not responsible for the existing anom- 
aly that a .Government endowed with the sovereign attri- 
bute of coining money, and regulating the value thereof, 
should have no power to prevent others from driving the 
coin out of the country, and filling up the channels with 
paper circulation, which does not represent gold and silver." 



v.] IN THE THIRTY-FIFTH CONGRESS. 103 

Is President Buchanan condemning fiat money, and an 
expansion of greenbacks, and the silver dollar that is not a 
dollar, before the time ? At any rate, he is throwing out 
some sound hints for the youthful representative from 
Ohio to work up into our sound national bank currency. 

The President proceeds : 

"It is one of the highest and most responsible duties of 
government to insure to the people a sound circulating me- 
dium, the amount of which ought to be adapted, with the 
utmost possible skill, to the wants of internal trade and 
foreign exchange. If this be either greatly above or 
greatly below the proper standard, the market value of 
every man's property is increased or diminished in the same 
"proportion, and injustice to individuals, as well as in- 
calculable evils to the community, are the consequence. " 

The President says further, and ' he seems to be putting 
words into the mouth of our Secretary to combat the 
greenbacks of our own time: " No bank ought ever to be 
chartered without such restrictions on its business as to se- 
cure this result" [its redeemability in coin]. "All other 
restrictions are comparatively vain. This is the only true 
touch-stone; the only efficient regulator of a paper cur- 
rency ; the only one which can guard the public against 
over-issues and bank suspensions. As a collateral and 
eventual security, it is doubtless wise, and in all cases 
©ught to be required, that banks shall hold an amount of 
United States or State securities equal to their notes in 
circulation, and pledged for their redemption. This, how- 
ever, furuishes no adequate security against over-issues.' 
Mr. Sherman would add, unless those securities be depos- 
ited with the Government in exchange for currency. " On 
the contrary, it may be perverted to inflate the currency," 
[as greenbacks now would do.] "Indeed, it is possible 



104 HON. JOHN SHERMAN. [chap. v. 

by this means, to convert all the debts of the United Stales 
and State governments into bank notes, without reference 
to the specie required to redeem them. However valua- 
ble these securities may be in themselves, they can not be 
converted into gold and silver at the moment of pressure, 
as our experience teaches, insufficient time to prevent bank 
suspensions and depreciation of bank notes." Our Secre- 
tary has taken these same ideas, or ideas just like them, and 
so modified them as to make them safe by suitable limita- 
tions and restrictions. 

The President then proceeds to show how the paper has 
increased as compared with specie, and says: " From this 
statement it is easy to account for our financial history for 
the last forty years. It has been a history of extravagant 
expansions in the business of the country, followed by ru- 
inous contractions. At successive intervals the best and 
most enterprising men have been tempted to their ruin by 
excessive bank loans of mere paper credit," (Mat money >. 
" exciting them to extravagant importations of foreign 
goods, wild speculations, and ruinous and demoralizing 
stock gambling. When the crisis arrives, as arrive it 
must, the banks can extend no relief to the people. In a 
vain struggle to redeem their liabilities in specie they are 
compelled to contract their loans and their issues, and at 
last, in the hour of distress, when their assistance is most 
needed, they and their debtors together sink into insolv- 
ency." 

This view of the old financial system and its defects, is 
necessary to bring out, in bold relief, the full value of our 
present national bank system, and the part borne in it by 
our Secretary, as will be seen when we come to review 
that stage of Government financiering. 



CHAPTEK VI. 

THIRTY-SIXTH CONGRESS —FIRST SESSION. 

This Congress opened with ominous indications of a 
coming storm. Few in the North believed there would be 
war, most in the South hoped there would not be ; but war 
or no war, union or disunion, it was determined that slav- 
ery should prevail, and this depended on the question 
whether Kansas should be admitted as a free or slave 
State. Things looked so auspicious for the South that 
President Buchanan opened his message at the beginning 
of this Congress with quite an air of triumph. The de- 
cision of the United States Court, in the Dred Scott case, 
and the execution of John Brown, had made the South 
almost certain that they were masters of the situation. It 
was under this inspiration that the President wrote his 
message, as follows : 

"While it is the duty of the President, from time to 
time, to give to Congress information of the state of the 
Union, I shall not refer in detail to the recent sad and 
bloody occurrences at Harper's Ferry. Still it is proper to 
observe that these events, however bad and cruel in them- 
selves, derive their chief importance from the apprehen- 
sion that they are but symptoms of an incurable disease in 
the public mind, which may break out in still more dan- 
gerous outrages, and terminate at last in open war by the 
North to abolish slaverv in the South." 

(105) 



X 



106 HON. JOHN SHERMAN. [chap. 

The war came, it is true, but it was begun in the South, 
and by the South to perpetuate slavery. 

"I firmly believe," says the President, " that the events 
at Harper's Ferry, by causing the people to pause and re- 
flect upon the possible peril to their cherished institutions, 
will be the means, under Providence, of allaying the exist- 
ing excitement, and preventing further outbreaks of a sim- 
ilar character." 

Kefe'rring to the Dred Scott decision, he says: "I cor- 
dially congratulate you upon the final settlement by the 
Supreme Court of the United States, of the question of 
slavery in the Territories, which had presented an aspect 
so truly formidable at the commencement of my adminis- 
tration. The right has been established of every citizen, to 
take his property of any kind, including slaves, into the 
common territories belonging equally to all the States of 
the Confederacy, and to have it protected there under the 
Federal Constitution. Neither Congress, nor a territorial 
legislature, nor any human power, has any authority to 
annul or impair this vested right. The Supreme Judicial 
Tribunal of the country, which is a co-ordinate branch of 
the Government, has sanctioned and affirmed these prin- 
ciples of constitutional law so manifestly just in them- 
selves, and so well calculated to promote peace and har- 
mony among the States. . . . Thus has the status 
of a territory during the intermediate period from its first 
settlement until it shall become a State, been irrevocably 
fixed by the final decision of the Supreme Court. Fortu- 
nate has this been for the prosperity of the territories as 
well as the tranquillity of the States. Now, emigrants 
from the i^orth and the South, the East and the West, 
will meet in the territories on a common platform, having 



vi.] THIRTY-SIXTH CONGRESS— FIRST SESSION. 107 

brought with them that species of property best adapted, 
in their own opinion, to promote their welfare." 

These are the views and feelings with which President 
Buchanan wrote this message. Before it was read, if he 
watched the movements in Congress, he must have begun 
to feel serious misgivings. Mr. Sherman, of Ohio, the 
man who, like a young man of old, had brought from 
Kansas the "evil report" of the invading slave-holders 
from Missouri, the David who had dared to stand up in 
the 'House on the 6th of January, 1858, and set on foot 
an investigation into the affairs of the Brooklyn Navy-yard, 
and, in a minority report, had hinted strongly at the idea 
of impeachment,— this man, now, of all others, was a 
prominent candidate for Speaker oMie House. The first 
vote for Speaker, in that Congress, was taken on the 5th 
of December, when Mr. Bocock, of Virginia, had eighty- 
six votes, and Mr. Sherman sixty-six, with seventy-eight 
votes scattering. 

At this the South became alarmed, and John B. Clark, 
of Missouri, moved as follows: 

"Whereas, Certain members of this House, now in 
nomination for Speaker, did indorse and recommend the 
book hereinafter mentioned:* 

*The following conversation, reported for the Cincinnati En- 
quirer, will explain the circumstance to which this preamble 
refers: 

"What were the circumstances of your signing the Helper tes- 
timonial?" 

" Why, a member of Congress from New York, by the name of 
Wheeler, or something like that, took around a paper proposing 
that old Francis 1'. Blair, then acting with the Republicans, 
should he employed to write a campaign document embodying 
and abbreviating the facts contained in a hook by Mr. Helper, of 
North Carolina, showing the injury wrought by slavery. You 



108 HON. JOHN SHERMAN. [chap. 

"Resolved, That the doctrine and sentiments of a certain 
book called ' The Impending Crisis of the South, How to Meet 
It,' purporting to have been written by one Hinton E. 
Helper, are insurrectionary and hostile to the domestic 
.peace and tranquillity of the country, and that no member 
of this House, who lias indorsed and recommended it, or 
the compendium from it, is fit to be Speaker of this House." 

The next day, Mr. Gilmer, of North Carolina, moved 
to amend the above by striking out all after the word re- 
solved, and inserting in lieu thereof the following, viz: 

"Whereas, The circumstances and condition of the 
country require that the asperities and animosities, which 
for the last few years have been rapidly alienating one sec- 
tion of the country from another, and destroying those 
fraternal sentiments, which are the strongest supports of 
the Constitution, should be allayed; whereas, inasmuch as 

can see the inconsistency the Blairs are put in when I mention 
this fact. In 1859 I was beaten for Speaker by co-operating with 
the Blairs, and in 1879 you see where the Blairs stand. Mr. 
Clark, of Missouri, was the person who adopted that ingenious 
device to beat me.'' 

"How came you, so early in your career, to be nominated for 
Speaker of Congress?" 

"Well, the party was new and made up of young men at that 
time. Besides, we were in a minority, and the caucus nomi- 
nation for Speaker was not equivalent to an election. I saw, 
after two or three ballots, that I could not be elected, and stood 
ready at any moment to resign if any other person in the party 
could be elected Speaker After balloting nine weeks, I found 
tli at three persons outside our party, one of whom was Henry 
Winter Davis, of Maryland, were willing to vote for Mr. Pen- 
nington, of New Jersey. I then withdrew, and he was made 
Speaker; but the fight they made against me attracted the at- 
tention of the whole country, and put me at the head of the 
Ways and Means Committee." 



VI.] THIRTY-SIXTH CONGRESS— FIRST SESSION. 109 

the history of the Government furnishes instances of suc- 
cess in giving quiet to the country, by the united ex- 
ertions of conservative national men, irrespective of party, 
there is reason to hope for a like result from similar labors, 
whereas, in 1851, when the minds of the people of the 
North and of the South were inflamed on the subject of 
slavery, national men appealed to the country as follows, 
to- wit: 

"The undersigned members of the Thirty-first Congress 
of the United States, believing that a renewal of sectional 
controversy upon the subject of slavery, would be both 
dangerous to the Union and destructive of its objects, and 
seeing no mode by which such controversy can be avoided 
except by a strict adherence to the settlement thereof, ef- 
fected by its compromise acts, passed at the last session of 
Congress, to maintain said settlement inviolate, and resist 
all attempts to repeal or alter the acts aforesaid, unless by 
the general consent of the friends of the measure and to 
remedy such evils, if any, as time and experience may de- 
velop. 

" And for the purpose of making this resolution effective, 
they further declare that they will not support for the 
office of President or Vice-President, or of Senator or 
Representative in Congress, or as member of State Legis- 
lature, any man, of whatever party, who is not known to 
be opposed to the disturbance of the settlement aforesaid, 
and to the renewal, in any form, of agitation upon the sub- 
ject of slavery." 

This was signed by Henry Clay and forty-three others, 
mostly from the South. Then follows an extract from the 
platform of the Democratic Convention in Baltimore, in 
1852, to the effect that i( Congress has no power to interfere 
with slavery." In the same year the Whig party pro- 



110 HON. JOHN SHERMAN. [chap, 

claimed its adhesion to the compromises of the Fugitive 
Slave Law. Mr. Gilmer's resolution, after citing all these, 
was to abide by them. These not being agreed to, Mr. 
Gilmer modified his resolution by adding; "And that no 
member should be elected Speaker of this House, whose 
political opinions are not known to conform to the follow- 
ing sentiment." 

But no vote could be reached on this resolution, and it 
was informally passed over, and the House proceeded with 
the election of Speaker, when John Sherman had 107 votes, 
Bocock 88, and Gilmer 22. The House now voted 
steadily, giving Mr. Sherman a plurality of votes, often 
within one of an election, until the thirty-ninth ballot, on 
January 27th, when William H. N. Smith, of North 
Carolina, had a plurality, and Mr. Sherman withdrew. 
Then, on February 1, Pennington, of New Jersey, was 
elected on the forty-fourth ballot. 

Upon the organization of the House, Mr. Sherman was 
put at the head of the Committee of "Ways and Means, 
just the place where he could do the most good, and best 
study the subject of finance. In this position he dis- 
tinguished himself (as in fact he has done in every official 
position he has held) as a clear-headed, straightforward 
man, of untiring industry, prompt in his decisions, prac- 
tical in his views, and commanding in his influence. His 
success in this committee was the more conspicuous by con- 
tract with that of the preceding Congress. While J. 
Glancy Jones was chairman of this committee the business 
of the House lagged far behind that of the Senate- But it 
was a subject of comment and frequent remark in the 
country, that Mr. Sherman kept the business of the House 
even in advance of that of the Senate. This must have 
been owing to the clearness with which he saw the best 



vl] THIRTY-SIXTH CONGRESS— FIRST SESSION, 111 

measure, whether suggested by himself or others; the 
promptness of his decision, and the facility with which lie 
could bring others to his views, or yield his to theirs, when 
theirs were best. 

Mr. Sherman's position now was one of all others best 
adapted to the bent of his mind. The whole matter of 
finance, whether in government or individuals, may be 
comprehended in the answers to these several questions : 
1. What are the sources of revenue? 2. The best way to 
get it. 3. How to keep it. 4. The best way to use it. 
The first two of these questions are to be answered by the 
Committee of Ways and Means. The greater part of Mr. 
Sherman's efforts in Congress thus far had been in refer- 
ence to the third of these questions, viz: How to keep it. 
He was ever watchful against leaks in the treasury. The 
greater part of his efforts were in this direction. When 
on the Committee on Foreign Affairs, he looked up and 
prepared to stop the payment of those old claims for French 
spoliation ; and, when the matter came up in 1867, he had 
the plug ready to stop the leak. When upon the Com- 
mittee of Naval Affairs, in the late Congress, he discovered 
those immense frauds in the Brooklyn and. Philadelphia 
Navy-yards, and it seemed to be from natural instinct that* 
he put forth a vigorous effort to arrest them. It was not 
done with the intention of annoying or impeding President 
Buchanan, but to save funds. He is not a quarrelsome 
man. We have seen in him no disposition to wrangle, nor 
make capital for himself, by attacking large game. Now, 
Mr. Sherman is on a committee where he may and must 
study into the subject of where and how to get the means 
of carrying on the Government. This, in the last half of 
Buchanan's Presidency, was no sinecure. The President 
said in his message: 



112 HON. JOHN SHERMAN. [chat. 

" It will appear, from the report of the Secretary of the 
Treasury, that it is extremely doubtful, to say the least, 
whether we shall be able to pass through the present and 
next fiscal year without providing additional revenue ; and 
this can only be done by strictly confining the appropri- 
ations within the estimates of the different departments, 
without making an allowance for any additional expendi- 
tures which Congress may think proper, in their discretion, 
to authorize, and without providing for the redemption of 
any portion of the 820,000,000 of treasury notes which 
have been already issued." 

The interest-bearing debt was about 862,000,000. The 
rate which the Government was compelled to pay for the 
use of money, at that time, was about twelve per cent, per 
annum. With the credit of the nation as low r as this, and, 
at that, not able to pay its debts, bills incurred for current 
expenses, there is evidently a mighty work ahead, not only 
for the Committee of Ways and Means, but for the rising 
financier of the nation. Suffice it to say here, difficult as 
it was, the work of the former was done to the satisfaction 
of the House, and in a manner which very much endeared 
Mr. Sherman to the nation. 

Take the following as an instance out of many that 
might be named : 

On the 28th of February, 1860, Mr. Sherman said : 

" I am instructed, by the Committee of Ways and Means, 
to report back, with an amendment, a bill which was re- 
ferred to this committee." 

The amendment proposed to pay twenty cents a mile, in 
a straight line, instead of the old rates of mileage to 
members. 

"This bill in relation to mileage was sent to the Com- 
mittee of Ways and Means, and we were compelled to act 



vi.] THIRTY-SIXTH CONGRESS— FIRST SESSION. 113 

upon it, and I think now the best way to commence the 
active legislation of this session is to correct what every 
body admits to be a very great evil. The present system 
is grossly unequal and unfair, as all admit. Some mem- 
bers receive five or six thousand dollars for mileage each 
gession, while others receive not so many hundred. When 
the system of mileage was first adopted, it was intended 
not only as payment of the expenses of members from the 
places of their residence, but to pay for the time consumed 
in traveling here. In the early days of our Government, 
many members of Congress were necessarily three or four 
weeks in getting here, after long and wearisome journeys. 
The present system is adapted to a state of things not now 
existing. The amendment recommended by the Commit- 

ipon by 



tee of Ways and Means, and unanimously agreed u 



them, saves the Government about $200,000 a year. It is 
true it takes from our compensation, but, notwithstanding, I 
think the measure is right, and ought to be adopted," says 
our future financier. 

Thus, in every instance where any thing could be done 
in this way, Mr. Sherman was in favor, first, of paying 
debts, doing right, and, second, saving expense. "A 
penny saved is a penny earned " is a maxim inwrought into 
the very mental and moral constitution of the Secretary of 
the Treasury. 

It will be remembered that, in the last Congress, a select 
committee had been appointed to investigate the abuses at 
the Brooklyn Navy-yard. By this committee, in its minor- 
ity report, some reflections were cast upon the President, 
for not scrutinizing more closely the conduct of his agents. 
So far, the President had been satisfied with the manner in 
which his conduct had been whitewashed by the majority re- 
port, seeing no action had been taken upon it by Congress. 



114 HON. JOHN SHERMAN. [chap. 

Bat things were changed now. Mr. Sherman was rising, 
and Mr. Buchanan was going down. On the 16th of Febr 

ruary, Mr. Sherman brought forward the resolutions of the 
minority of the committee on the abuses in the Brooklyn 
Navy-yard, and they were referred to the Committee on 

the Navy Department. Mr. Hatton, from that commit- 
tee, reported them to the House, and they were passed, on 
the 13th of June, by a large majority. 

The same influences that prevailed in the House prompted 
several other resolutions of inquiry. One, by Mr. Hoard, 
that "a select committee be appointed to inquire into any 
improper attempts, on the part of any one connected with 
the executive departments, to influence the action of mem- 
bers." 

Another, by Mr. Covode, " to inquire whether the Pres- 
ident of the United States, or any other officer of the Gov- 
ernment, has. by money, patronage, or any other im- 
proper means, sought to influence the action of Congress, 
or any committees thereof, for or against the passage of any 
law appertaining to the rights of any State or Territory." 
Several other matters were included. The President, in a 
letter to the Pittsburgh centenary celebration, of the 25th 
of November, 1858, speaks "of the employment of money 
to carry elections." This, also, was to be inquired into. 
This was received by suspending rules, by a vote of 117 to 
45. Mr. Hoard's resolution cited the fact that a Repre- 
sentative from the State of Pennsylvania, Mr. Hickman, 
did, on the 12th of December last, on the floor of this 
House, make this statement: "Mr. Buchanan could not 
purchase me, so I can not be purchased by others. I have 
already been offered more than I am worth, and refused to 
sell myself at that." 

"On the same day, Mr. Haskin, a Representative from 



vi.] THIRTY-SIXTH CONGRESS— FIRST SESSION. 115 

the State of New York, on the floor of this House, made 
the following statement: 'In answer to this (a charge of 
being one of the mercenary band), let me say that no one 
knows better than Mr. Buchanan himself, the utter false- 
hood of this charge, for he endeavored by threats and by 
seduction of patronage, without effect, to draw true men 
away from the path of duty.' 

"And on the 14th day of December last, Mr. Adrian, a 
Representative from New Jersey, on the floor of this 
House, made the following statement : ' During the Le- 
Compton controversy, I was approached in such a manner 
as shows corruption on the part of the administration.'" 

On these grounds, Mr. Hoard's committee was ap- 
pointed. 

To these proceedings the President sent two protests in 
the form of messages to the House, — one on the 29th of 
May, and another on the 25th of June. The first one was 
aimed more particularly at the Covode Committee of In- 
quiry, in reference to the alleged attempts to influence the 
decision of the Kansas affairs. In reference to this, the 
President says: "I feel proudly conscious that there is no 
public act of my life, which will not bear the strictest scru- 
tiny. I defy all investigation. Nothing but the basest 
perjury can sully my good name. I do not fear even this, 
because I cherish an humble confidence that the Gracious 
Being, who has hitherto defended and protected me against 
the shafts of falsehood and malice, will not desert me now, 
when I have become old and gray-headed. I can declare 
before God and my country, that no human being (with an 
exception, scarcely worthy of notice), has at any period of 
my life, dared to approach me with a corrupt or dishonora- 
ble proposition; and until recent developments, it had never 
entered my imagination that, any person, even in the storm 



11,; HON. JOHN SHERMAN. [char 

of political excitement, would charge me, in the most re- 
mote degree, with having made such a proposition to any 
human being. I may now exclaim, in the language of com- 
plaint employed by my first and greatest predecessor, ' that 
I have been abused in such exaggerated and indecent terms, 
as could scarcely be applied to a Xero, to a notorious de- 
faulter, or even to a common pickpocket.' I do, therefore, 
for the reasons stated, and in the name of the people of 
the several States, solemnly protest against these proceed- 
ings of the House of Representatives, because they are in 
violation of the rights of the co-ordinate Executive branch 
of the Government, and subversive of its constitutional 
independence." 

By Mr. Sherman's motion, this was referred to the Com- 
mittee on the Judiciary. 

In the other message, most of the argument is directed 
against the Covode Committee, but the keenest thrust is 
made at Mr. John Sherman. Mr. Sherman had been the 
first to probe the festering wounds of the Republic, and the 
force of the instrument was most keenly felt. The Presi- 
dent did not aim directly at him, but said: "The House, 
on a recent occasion, has attempted to degrade the Presi- 
dent, by adopting the resolution of Mr. John Sherman, de- 
claring that, in conjunction with the Secretary of the Navy, 
'by receiving and considering the party relations of bidders 
for contracts, and the effect of awarding contracts upon 
pending elections, have set an example dangerous to the 
public safety, and deserving the reproof of this House.' 

"The absence of all proof to sustain this attempt to de- 
grade the President, whilst it manifests the venom of the 
shaft aimed at him, has destroyed the vigor of the blow. 

"To return, after this digression, should the House, by 
the institution of Covode committees, votes of censure, and 



vi.] THIRTY-SIXTH CONGRESS— FIRST SESSION. 117 

other devices to harass the President, reduce him to sub- 
servience to their will, and render him their creature, then 
the well-balanced government which our fathers framed, 
will be annihilated. This conflict has already been com- 
menced in earnest by the House against the Executive. 
I have passed triumphantly through this ordeal. 
My vindication is complete. The committee have reported 
no resolution looking to an impeachment against me ; no 
resolution of censure; not even a resolution pointing out 
any abuses in any of the executive departments of the Gov- 
ernment, to be corrected by legislation." 

Mr. Sherman, in answer to the President's protest, said : 
"Mr. Speaker, the President of the United States has 
made, for the first time, a protest against the exercise, by 
the House of Representatives, of one of its most important 
constitutional powers. I am willing to give to his commu- 
nication all the consideration which its gravity demands. 
I am willing this House should now consider, whether or 
not it has the power to investigate any thing and every 
thing which may be wrongly done by any officer of the 
executive branch of the Government; because, if the priv- 
ilege of exemption, which the President now sets up for 
himself, belongs to him, then it extends to and attaches to 
every subordinate under him. 

"The Constitution of the United States declares that the 
President, Vice-President, and all civil officers of the United 
States, shall be removed from office on impeachment for, 
and conviction of treason, bribery, and other high crimes 
and misdemeanors. It further declares, in another clause, 
that this House of Representatives shall have the power 
of impeachment. Under these clauses this House, sir, has 
the right to examine into any thing which may affect the 
conduct of any public officer under this Government, from 



118 HOX. JOHN SHERMAN. [chap. 

the Chief Executive down to the little page that runs on 
your errands upon this floor. Every one of the officers of 
this Government is subjected to the power of this House, 
But the President says we can not make our inquiries but 
in one way, and that is by preferring articles of impeach- 
ment. How T will you prepare articles of impeachment? 
How will you take preliminary proof necessary to ascertain 
whether an officer of this Government has violated his 
duty? Only, sir, by preliminary examination. There is 
no other way. It is only by taking testimony that you can 
ascertain whether or not there is good ground to charge 
that an officer of the Government lias violated his public 
duty. How else can we do it? 

"What does the President of the United States gravely 
ask us to do in the message which has just been read? 
That this high judicial body shall find an impeachment 
upon mere rumor? Shall we, upon the mere rumors which 
are circulating in the newspapers, and upon the streets, 
find an impeachment? The very necessity of the case im- 
plies that we have a right to investigate all charges made 
in the public prints, and elsewhere. If it is alleged that 
the President has been seriously and improperly connected 
with certain transactions, we have a right in this House to 
inquire into the probable truth of these things. If we find 
that they are probably true, then it is our duty to prefer 
articles of impeachment against the President at the bar of 
the Senate. 

"Why, sir, we have examined into the conduct of our 
own members, — into the conduct of a Senator; we have 
the right to inquire into the conduct of any of the officers 
of this Government, and shall the President escape? At the 
hist session of Congress — indeed, at almost every session of 
Congress — the conduct of some executive officer has been 



vi.] THIRTY-SIXTH CONGRESS— FIRST SESSION. . 119 

inquired into. What provision of the Constitution exempts 

the President from this inquiry? What distinction is there 
between him and the members of this House? Do not I 
stand upon the same constitutional right, as the Represen- 
tative of one hundred thousand people, as the President of 
the United States does as the representative of millions? I 
have the same constitutional right, and am subject to the 
same mode of trial for malfeasance, or non-feasance — no 
more, no less. So with every officer of this Government. 
There is no exception made in favor of the President. 

"Mr. Speaker, the doctrine set up by the President of 
the United States in this message, is the same under which 
Europe was governed for a thousand years — that the king 
can do no wrong. That is the doctrine — that the king 
could do no wrong. Charles I. went to the block because 
the people of England declared that the king was not 
above and beyond their power. . So it was with Louis XVI. 
and the French people. This doctrine, set up by the Pres- 
ident of the United States, is, in my judgment, the very 
worst that has been announced since the foundation of this 
Republic — his conduct not to be inquired into." 

The other message of the President, protesting against 
the action of the House, was received but a few hours be- 
fore the close of the session, and, of course, there was no 
opportunity to reply. 



CHAPTER VII. 

THIRTY-SIXTH CONGRESS, SECOND SESSION. 

The storm of war begins. South Carolina " resumes 
the powers delegated to the General Government," and 
then secedes. The President sends a message on the peril- 
ous state of the country, which is referred to a committee 
of thirty. 

Congress met on the 3d of December. On the 5th Mr. 
Sherman was ready with an appropriation bill. There 
seems then to have been a disposition to attach "riders." 
One was attached limiting the course of study at West 
Point, but the method of doing business adopted by the 
chairman of the Committee of Ways and Means being 
straightforward and direct, he waived all side issues and 
pushed the matter to a vote. 

It may be of some interest to know what was Mr. Sher- 
man's plan of saying the Union then, when expedients 
were in vogue, as they have been since upon resumption: 

"By Mr. Sherman. — Betolved, That the only true and 
effectual remedy for the dissensions that now exist between 
the several States, and the people thereof, is in the faithful 
observance, by the several States and the people thereof, 
of all the compromises of the Constitution, and of the laws 
made in pursuance thereof. 

"Resolved, That the special committee of thirty be in- 
structed to inquire whether any State, or the people there- 

(120) 



p. VIL] THIRTY-SIXTH CONGRESS, SECOND SESSION. 121 

of, have failed to obey and enforce the obligations imposed 
by the Constitution ; and if so, the remedy thereof, and 
whether any further legislation is required to secure such 
enforcement. 

"Resolved, That in order to avoid all further contro- 
versies in regard to the several Territories of the United 
States, said committee divide said territory into States 
of convenient size, with a view to their prompt admission 
into the Union on an equal footing with the other 
States." 

This simply shows that Mr. Sherman was neither a rad- 
ical nor an extremist even amidst the excitement of those 
stirring times. 

Again, Mr. Sherman is in search of frauds on the 
Treasury. Mr. Morris, of Illinois, came near getting the 
start of him, and proposed a select committee of five to 
look after certain bonds that had disappeared from the 
Interior Department. But Mr. Sherman asked him to 
wait, as the Secretary of the Interior would soon give the 
required information. On the same day the Speaker laid 
before the House a communication from the Secretary of 
the Interior, stating that ' ' on Saturday night last he was 
informed, by the voluntary confession of an officer of his 
Department, that State bonds held in trust by the United 
States Government, for certain Indian tribes, to the amount 
of 8870,000, had been abstracted from its custody, and 
converted to private use." 

It might have been well if Mr. Sherman had been ap- 
pointed on the Committee on Indian as well as Naval 
Affairs, in the Thirty-fifth Congress. 

As an indication of the amount of labor, care, and 
thought exercised by that man in the short second session 

of the Thirty-sixth Congress, lasting seventy-five days, ex- 

II 



122 HON. JOHN SHERMAN. [chap. 

elusive of holidays and Sundays, he was on the floor, 
speaking more or less over two hundred times. 

The following are his remarks upon the Treasury Note 
Bill, only one week after he was appointed on the com- 
mittee. He must have labored night and day to get all 
these figures together. Mr. Sherman said; 

"Mr. Speaker, the House will perceive that the bill, 
now before us, is a mere temporary expedient to provide 
for the pressing demands upon the Treasury. Most of the 
members are aware that the Government has not been able 
to pay, for the last week or two, our own salaries, and 
many other demands at New York and other places. The 
revenues have fallen short, during the last week, amount- 
ing, I believe, to but $250,000. Most of the revenues are 
now paid in Treasury notes. This bill authorizes the issue 
of $10,000,000 Treasury notes for temporary purposes. 
The amount now outstanding is indeed in excess of the 
amount authorized by this bill ; so that the bill provides 
for no increase of the debt. 

" I might here rest, as to what I have to say about this 
bill, but it is proper for me to add that it will be necessary 
for the House, very soon and promptly, to consider some 
other measures of relief. On the 1st of July last there 
was in the Treasury $3,629,206, a balance entirely too 
small to carry on the ordinary operations of the Treasury, 
During the first quarter of the fiscal year the expenditures 
exceeded the receipts some 82,000,000, and there are now- 
unpaid appropriations to the amount of ten or fifteen 
millions. 

"The receipts during the current quarter will probably 
fall several millions short of the necessary expenditures, 
and if we are to judge from the temper of the times, the 
distress in the country, and the political difficulties that 



vii.] THIRTY-SIXTH CONGRESS, SECOND SESSION. 123 

surround u^, it is probable that during the remaining three- 
quarters of this fiscal year, there will be a deficiency of 
from ten to fifteen million dollars. This is not the fault 
of this House, but it is the fault of our revenue laws. 
For the last three years we have been living upon the 
credit of the Government. I have a paper before me 
showing that since the 1st of July, 1857, we have been 
going in debt to the extent of nearly fifty million dollars. 
In the fiscal year ending June 30, 1858, the deficiency, or 
excess of payments over revenue, amounted to $27,162,188. 
In the next fiscal year it amounted to 815,902,932. Dur- 
ing the last fiscal year it amounted to $6,725,000, and 
according to the statement already made, during the pres- 
ent fiscal year the deficiency has been not less than from 
fifteen to twenty million dollars. I have prepared a state- 
ment which shows at a glance the changed condition of 
our finances in three years. 

"On the 1st of July, 1857, the entire debt of the Gov- 
ernment, after deducting the balance then in the Treasury, 
was $11,350,272.63. 

In 1858 it was $38,512,462.56. 
In 1859 " " $54,415,393.79. 
In 1860 " " $61,140,497.00. 

"It is manifest, therefore, that the House, in order to 
preserve the credit of the Government, ought to make 
some change in the revenue laws or to diminish the expen- 
ditures. We must either, by a bold stroke, reduce the 
expenditures fifteen or twenty million dollars, or contract 
new loans, or raise new revenues. The bill now pending 
in the Senate, I need not inform the members of this 
House, authorizes a loan of some $20,000,000, and in 
addition to that provides for the increase of the revenue. 



124 HON. JOHN SHERMAN. [chap, 

If that bill should pass, and if the present disturbed con- 
dition of the country be healed up, then the annual reve- 
nue would amply cover our expenditures, upon the basis 
of existing laws and salaries; but with the present diffi- 
culties, and with our present revenue laws, it is manifest 
that this bill will not be the last loan bill, nor the last 
Treasury note bill that the Committee of Ways and Means 
will have to report to this House." 

The above statement is simple and clear. A peculiarity 
in Mr. Sherman's financiering is to keep the country ad- 
vised of the exact condition of the Treasury, the revenues 
and the expenditures, and, above all, of the debts. This 
is the first clear statement the writer has found (in these 
three years) of the national debt. Another peculiarity is 
an irrepressible impulse to prevent even the smallest loss or 
needless expenditure, A -third is, in all possible cases to 
" pay as you go." Contract no debt for current expenses, but 
if there are debts, to be always sinking them, if possible. 

On the 2d day of February another loan bill was pro- 
posed by the Committee of Ways and Means, which closed 
with these words: "But no additional compensation shall 
be allowed to any person receiving a salary by law." 

Mr. Sherman said: "In last December, at the pressing 
instance of Mr. Secretary Cobb, we authorized the issue of 
$10,000,000 treasury notes, with the specific pledge of the 
balance of the loan of June 22d, for the redemption of these 
treasury notes; and now my friend from Missouri proposes 
to take that loan, thus specifically pledged for the redemption 
of these treasury notes, and apply it to the current expenses 
of the Government. I say that it would be a violation of 
the public faith, for this Congress to pass the law now pro- 
posed by the gentleman from Missouri. The moneyed men 
of New York would snv the credit of the Government had 



vii.] THIRTY-SIXTH CONGRESS— SECOND SESSION. 125 

been violated, because, when they took the treasury notes, 
under the law of December last, it was with a specific pledge, 
with a mortgage in fact, upon the loan of the 22d of June 
last." So watchful was Mr. Sherman 10 guard the public 
credit of the nation. But this was not all; he closed these 
remarks as follows: 

"And here let me say a word to my friends on this side 
of the House. I ask them, when we are compelled to come 
in here, with loan bill after loan bill, to enable the Gov- 
ernment to meet iis expenses, if it is not time to pause, in 
the appropriations they are making, certainly for the benefit 
of moonshine speculations for rights within the jurisdiction 
of a foreign government/' As much as to say, let not a 
dollar be wasted. 

Again, Mr. Sherman said on the same subject: "The 
sum we have to do is not beyond the capacity of the 
youngest boy in an arithmetic class. Here we have a debt 
of S25,000,600, and how are we going to pay it? You 
have $10,000,000 of treasury notes, bearing twelve per 
cent, interest, which are due next December. How are 
you going to pay them? My friend from Missouri say>, 
by a loan in the tariff bill. But there is already a loan bill 
upon our statute books, under which these treasury notes 
can be withdrawn when they become due Why then re- 
peal one law to give place to another, unless it be to show 
that the new administration has borrowed $21,000,000 to 
pay the liabilities of the Government? I say to you, gen- 
tlemen on the other side, pay your own liabilities, or pledge 
the Government credit for enough money to pay them. I 
trust that the incoming administration will not come into 
this House, and ask, year after year, loan bills to pay cur- 
rent expem< 

The reader has now followed Mr. Sherman through his 



126 HON. JOHN SHERMAN. [chap. 

three terms in Congress ; various incidents (some of them 
may appear trifling, too much so, perhaps, to be cited here) 
have been noticed in the order of time in which they 
occurred, and not in the order of subjects to which they 
relate. But they are put down here as they occurred, in 
'order to give a living representation of what he has done, 
and the manner in which it has been done. 

The three terms that Mr. Sherman served in the House 
of Representatives, were the training school in which the 
great financier was educated. But in all this time he had 
no teacher but himself; and it is evident that that teacher 
was a very industrious one, very apt to teach, and the 
learner equally apt and industrious. He always directed 
his attention to subjects as they were providentially brought 
before him. When appointed on the Committee on Foreign 
Relations, he studied up the subject of the claims for French 
Spoliation prior to 1800, but it was in order first to do right, 
and next to save money to the Government. When he was 
put upon the Committee on Naval Affairs, he studied dili- 
gently the whole system of contracts for ship-building, 
repairs and supplies to the navy, in order to find out how 
the funds could be used most economically for the Govern- 
ment. Though not the chairman, he did not wait to be set 
to work by the responsible head, but set himself to work 
and study, being both master and pupil. He had a select 
committee appointed, of which he was chairman, and in a 
little over a month he filled a volume of a thousand pages, 
detailing the most enormous abuses and official neglect and 
favoritism, where vast sums were wasted, at the very time 
the treasury was running in debt for current expenses. He 
was put on the Kansas Investigating Committee, and 
though not the chairman, yet was ready to take a part in 
the work that won him the applause of one side and the 



vii] THIRTY-SIXTH CONGRESS— SECOND SESSION. 127 

hatred of the other. The motive that prompted him in 
this was not so much financial economy, as an irrepressible 
desire to see right done, and violence and fraud suppressed. 
His regard for what was morally right, for what is agree- 
able to constitution and law, for good order and fair play, 
was the impelling motive. 

When the danger was threatening of a disruption of the 
Nation, the remedy proposed by him was the sensible one, 
that national compacts and compromises should be strictly 
observed; that the Government should search out the 
delinquents, and remove the temptations to party strife. 

Mr. Sherman urged a reform in the system of mileage, 
because it saved money to the Government, was fair to the 
members, though it took money out of his own pocket. 
With the same view and the same self-sacrifice, he made 
an unsuccessful effort to abolish the franking privilege, 
though it has since succeeded. As a student, then, he was 
ready to enter any department of study that offered, and 
as a teacher gave sound instructions; but in every thing 
almost there was more or less direct reference to the guild. 
Finance was his specialty, and it nearly always came in 
somewhere. Even in reference to Kansas, there was a 
.questioning whether money had not been. used to carry a 
measure, and on another occasion a caution against "moon- 
shine speculations in a foreign country." 

Mr. Sherman evidently has an almost unbounded capacity 
for learning. Considering the immense variety of the sub- 
jects that came under observation, the extensive reading 
required, and often the closest investigation, in order to be 
well posted in regard to them, the rapidity with which he 
must often make his decisions, the immense responsibility 
if a decision were wrong, with two hundred learned men 
around to detect the slightest error, the whole nation, in 



128 HOX. JOHN SHERMAN'. [chap. 

fact, looking- on, many of them hitter opponents; and yet 
seldom do we ever hear of a slip of the tongue, the pen, or 
the memory. To rise more than two hundred times in 
seventy-five days to address such an audience, on such a 
variety of subjects, implies a most remarkable capacity for 
learning, patience and industry in searching it out, memory 
in retaining it, and readiness in using it; four mental traits 
that rarely ever meet in the same person. 

Then, again, Mr. Sherman is not only honest financially, 
but most scrupulously truthful. In looking through some 
eighteen volumes of the Congressional Globe, during his 
three terms in the House, the writer does not remember a 
single instance where he is accused of crossing his tracks, 
or making an incorrect statement, or in the heat of debate 
saying what he is obliged to recant. 

Nor has Mr. Sherman so wonderfully escaped by any- 
thing like a timid or time-serving course. On the other 
hand he not only has strong and clear convictions, but is 
remarkably bold and prompt to avow them; and yet it is 
always done so coolly and courteously, and so well timed, 
that seldom ever is any offense taken. All this shows him 
to have been a thorough-going student, and an apt learner 
during his entire course in the House of Representatives. 

mr. Sherman's scheme of finance. 

While Mr. Sherman was in the House of Representa- 
tives, whenever he could put in a word, or do an act, or 
suggest any measure that could aid the Government finances, 
he did so. As already noticed, he brought forward some 
temporary measure-, and urged them with great force, to 
relieve the treasury. One speech was made in the House, 
May 7, 1860, upon the Morrill tariff bill. His first point 
was to show that the then existing tariff did not produce 



THIRTY-SIXTH CONGERS— SECOND SESSION. 



123 



revenue enough to pay expenses. Something then must 
be done. We must either diminish the expenses, or in- 
crease either the debt or the revenue. The idea that a 
"national debt is a national blessing," is an absurd one, 
and should never have been tolerated. He next asks, can 
the expenses be reduced? After pointing out various 
abuses that existed and sums squandered, he said: "If we 
could only manage these matters as intelligent business men 
manage theirs, there would be an end to all these abuses. 
This we can not do, because parties look to the public 
money as the reward of party success." 

On this account, he seems to have little hope of reduced 
expenses. "We will have to raise sixty-five or seventy 
millions the next fiscal year. Where is it to come from? 
We may expect from land sales perhaps $500,000 above 
expenses. Let us give away the lands to actual settlers 
It is the only honest, the only noble, the only manly syste 
of disposing of the public lands. Miscellaneous items fro 
consuls, fines, and forfeitures may reach $1,000,000. ^ To 
import duties alone can we look with confidence. ^ If re- 
quired, we might raise a revenue from this source of $100,- 
000,000." It was Mr. Sherman's opinion that if there 
should be an importation that would yield $60,000,000 
from the present rates of duty, as the Secretary of the 
Treasury predicts, it would prove a national misfortune 
second only to his practice of living upon the public credit. 
He approves, in the main, of the proposed tariff, because, 
as far as possible, it changes ad valorem, for specific duties, 
thus guarding against frauds. 

Another reason Mr. Sherman has for this bill. It is 
framed upon the idea that it is the duty of the Government 
in imposing taxes to do as little injury to the industry of the 
country as possible. "You may make a tariff to raise 



ni 
•oni 



130 HON. JOHN SHERMAN. [chap. vn. 

$40,000,000, and break up every industrial interest of the 
country. The Committee of Ways and Means report a 
tariff which will raise $65,000,000, and will do no injury 
to any industrial interest." 

The House passed the bill, but the Senate postponed its 
consideration to the next session. 

Other speeches were made in the House on December 
10, 1859, on the issue of $10,000,000 of Treasury notes, 
and on the 2d of February, on the loan of $25,000,000 
already noticed. Both of these, however, were temporary 
expedients. We shall next find Mr. Sherman in the Sen- 
ate, and on the Finance Committee, where he belonged, 
and commencing in earnest his great life work for his coun- 
try. 

When President Lincoln entered upon his office in 1861, 
Senator Chase was appointed Secretary of the Treasury, 
and resigned his seat in the Senate. After quite a pro- 
tracted contest, in which Governor Dennison and General 
Schenck were competitors, Mi*. Sherman was elected, and 
at the expiration of his term was re-elected, and served 
from March 4, 1861, to March 4, 1877, when he was made 
Secretary of the Treasury by President Hayes. 






CHAPTER VIII. 

MR. SHERMAN IN THE SENATE. 

The first session of the Thirty-seventh Congress (a called 
session) met July 3, 1861, and closed August 6th, and the 
second session (regular) convened December 2d, Mr. Sher- 
man serving on the Finance Committee, of which Mr. 
Fessenden was chairman. 

The Senate, as in Committee of the Whole, resumed the 
consideration of the bill to authorize the issue of United 
States notes, and for the redemption and funding thereof, 
and for funding the floating debt of the United States. 

The only point in doubt was, whether these notes should 
be made a legal tender in payment of public and private 
debts. Mr. Sherman was in favor of it, but only on the 
ground of necessity. Without this quality the paper would 
have become depreciated. He thought there was power 
constitutionally to pass it, and a necessity for it. "The 
Secretary of the Treasury, the Chamber of Commerce of 
New York, the Committee of Public Safety of New York 
city, the Chambers of Commerce of the cities of Philadel- 
phia and Boston, say this measure is indispensably neces- 
sary to maintain the credit of the Government. These 
men understand commercial matters better than most of us 
Senators." 

" But," says Mr. Sherman, " I do not intend to rest here. 
I desire to show the necessitv of it from reason. We have 

(131) 



132 HON. JOHN SHERMAN. [chaJ 

to raise and pay out, before the first day of July next, 
8343,235,000, 8100,000,000 now due to your soldiers and 
contractors. Where will you get this money? The banks 
have loaned all they can. We can not get it from taxa- 
tion for six months at least. We must borrow it. The 
most direct way would be to put your bonds upon the mar- 
kets of the world and sell them for what they will bring. 
Great Britain in her wars with Napoleon sold £420,000,000 
of securities for £260^000,000. She contracted a debt of 
£273 for every £100 received. But this would not have 
carried her through had she not adopted a national cur- 
rency of paper money — practically, if not legally, made a 
legal tender. 

"But this sl(>0,000,000 will be exhausted, and what 
then? Why, then we can sell bonds; but if we offer them 
now, without this legal tender, they will not bring sixty 
cents on the dollar. But it is said, repeal the subtreasury 
law, and take the currency of the State banks; yes, and 
bring us an inflated and irredeemable currency of the most 
dangerous character. 

"It is easy to criticise this bill. I dislike to vote for it. 
I prefer gold to paper money, but there is no other resort. 
We must have money or a fractured Government. 

"This measure, then, is necessary. Have we the con- 
stitutional power? We certainly have, if it be necessary 
to support the army and the navy, for we certainly have 
power to do that. This has been settled by precedent. It 
was done in the war of 1812, in the Mexican war, we re- 
ceive them now for our services, and we pay them to our 
soldiers and creditors. But this power is embraced in that 
of coining money. Congress has this power, and is not pro- 
hibited from issuing bills of credit. It is said if we pass 
this bill we do injustice to our creditors; and we certainly 



vm.j MR. SHERMAN IN THE SENATE. 133 

do, if we do not pass it. If you strike out this legal -tender 
clause, you issue notes that will fall dead upon the mar- 
ket, and the Government will be disgraced. 

"But I anticipate from this beneficial results. It will 
be the beginning of a national currency) for which the 
property of the nation is pledged, Then you can sell your 
bonds. We have this power, but it must not be used too 
often." 

The bill passed February 25, 1862. 

The next move in Mr. Sherman's grand financial scheme 
was the taxing of the bank bills. After explaining the 
difference between banks of discount and banks of issue, 
he states that the strongest banks issue the least number 
of bills, and the weakest issue the most, and quotes Secre- 
tary Chase's report in which he says; "Circulation is com- 
monly in the inverse ratio to solvency. Well founded in- 
stitutions, of large and solid capital, have in general com- 
paratively little circulation, while weak corporations almost 
Invariably seek to sustain themselves by obtaining from 
the people the largest possible credit in this form. Under 
such a system, or lack of system, great fluctuations and 
beavy losses in discounts and exchanges are inevitable, and 
not unfrequently, through failures in the issuing institu- 
tions, considerable portions of the circulation become sud- 
denly worthless in the hands of the people. 

"Bank after bank, filling the country with their notes 
issued upon fictitious capital, explode, and the note-holders 
sutler the entire loss. The strongest banks do not need 
this circulation, the weakest do not deserve it; therefore 
tax it out of existence. 

"The taxation of bank bills is simply a matter of equity. 
The business of banking is now heavily taxed by our ex- 
laws. All commercial paper, checks, drafts, orders, 



134 HON. JOHN SHERMAN. [cha?, 

bills of exchange, foreign and inland protests, certificates, 
bonds, powers of attorney, are heavily taxed ; then why not 
tax bank bills? Private bankers must procure a license at 
the expense of one hundred dollars, but banks of circula- 
tion are exempted. It is unjust to tax every thing else, 
and let bank bills go free. 

" Bank circulation should be taxed because, by the exi- 
gencies of Avar, the profits arising therefrom have been 
greatly enhanced ; and by the suspension of specie pay- 
ments great temptations are afforded to excessive issue." 

The following is a bit of secret history that ought to be 
preserved as a caution to the Government against ever re- 
suming the old State bank system ; 

"I say," said Mr. Sherman, "they ought to be taxed 
more heavily than other employments in life. Why, sir, 
I remember very well— and some of the Senators here re- 
member it also— an interview which was sought by the 
bankers of our chief commercial cities — all of them intelli- 
gent and patriotic men— with the Secretary of the Treas- 
ury, to which they invited the financial committees of the 
two Houses to hear their proposition for carrying on the 
financial operations of the Govern ineiit. We all went to 
the office of the Secretary of the Treasury, and the propo* 
sition was there made that the United States should issue 
no paper money whatever, that the specie clause (as it is 
called by the subtreasnry law) should be repealed, and 
that we should carry on the war upon the basis of the 
paper money of the banks, legalizing the suspension of 
specie payments, and that the Government should issue no 
paper, except upon an interest of six per cent, or higher, 
if the money markets of the world demanded more. That 
was their plan of finance — the plan substantially adopted 
in the war of 1812, and which has been condemned by 



vin.] MR. SHERMAN IN THE SENATE. IBB 

every statesman since that time — a plan of carrying on the 
operations of this great Government by an association of 
banks over which we had no control, and which could is- 
sue money without limit so far as our laws affected it." 

The objections were considered next. " 'This tax inter- 
feres with vested rights.'" "But," said Mr. Sherman, 
"all property is held subject to taxation by the Govern- 
ment, and it has the right to designate the objects of "taxa- 
tion. A State may, by law, make a contract with indi- 
viduals, which it can not impair by taxation, but it can 
not thus affect the power of Congress. ' But it discrimi- 
nates against banks.' So does every tariff and revenue act 
discriminate in the objects of taxation. If such are right, 
this can not be wrong. Is two per cent, too high on bills, 
and ten per cent, on fractional currency ? On the former 
it is but one-third of the profit derived from the issue of 
paper money without interest, the principal of which is 
not now paid in coin ; on the latter it is right because it is 
issued in violation of law, and this is the only way to sup- 
press it." 

In advocating this law, however, Mr. Sherman had a 
higher and grander purpose than merely to raise a reve- 
nue for the Government. This purpose was to induce the 
State banks to substitute for their paper that of the 
national banks, then just authorized, and thus replace the 
variable and unreliable currency authorized by the various 
States in the Union, by a sound and stable national cur" 
rency. He refers to the arguments in favor of establish- 
ing the first and second banks of the United States, the 
first by Hamilton, the second by Madison, as follows: "It 
is, however, essential to every modification of the finances 
that the benefits of a uniform national currency should be 
restored to the community. The absence of the precious 



136 HuN. JOHN SHERMAN [chap. 

metals will, it is believed, be a temporary evil; but until 
they can again be rendered the general medium of ex- 
change, it devolve- on the wisdom of Congress to provide 
a substitute, which shall equally engage the confidence and 
accommodate the wants of the citizens throughout the 
Union," 

" This," said Mr, Sherman, " is a statement of the whole 
matter. When coin, the best national currency, is driven 
out of circulation by the existence of war or other extrane- 
ous circumstances, then it is the duty of Congress to pro- 
vide substitutes." Mr. Sherman might have referred here 
to the message of President Buchanan, already cited in 
these pages, which distinctly outlined what has since be- 
come a reality in our national bank system, with all the 
guards thought desirable by that statesman. 

The following were Mr. Sherman's objections to local 
banks : 

1. The great number and diversity of bank charters — 
sixteen hundred and forty-two banks chartered by twenty- 
eight States, upon widely different bases. 

2. Their unequal distribution. "According to a recent 
statement," he says, " the circulation of banks in the 
Eastern States is about 8130,000,000, and of that 
amount one-third is computed to be in the Western 
country, I have no doubt we are now circulating in the 
West $40,000,000 of paper money issued by the banks in 
the East, and we are paying to the East the interest on 
this 840,000,0 

3. Losses by counterfeiting (which we can not prevent), 
on banks so diversified, are immense, and fall upon the 
whole people, 

4. Loss by broken banks is immense. 



VIII.] MR. SHERMAN L\ THE SENATE. 137 

5. Loss by exchange is ordinarily one per cent., and the 
writer has known it to be fifteen per cent. 

6. There is no power to prevent an over-issue, by which 
"all the values in the country may be destroyed, depend- 
ing upon baseless issue, the redemption of which can not 
be guaranteed." This can be prevented by taxation. 

7. " The system of local bank paper destroys all hope of a 
national currency, and defeats a plain provision of the Con- 
stitution. It is difficult to resist the conviction, that notes 
issued by State corporations are bills of credit prohibited 
by the Constitution of the United States." Here follows an 
able and conclusive legal argument against the right of 
States to emit bills of credit or authorize corporations to do 
so. — Congressional Globe. 

8. Another reason for doing away with State banks is, 
that "if the war is carried on with all this circulation 
afloat, when it ends we shall be overwhelmed with irre- 
deemable and worthless paper, as we were in 1815-20." 

9. Mr. Sherman showed how it would interfere with 
funding the national debt, and of course prevent "re- 
sumption." Here his forethought was laying a huge 
"anchor to the windward," to use when the storms of war 
should cease, and the result shows that it was needed. 

There can be no doubt that the displacement of State 
bank circulation by a national currency, brought about by 
this tax, has saved to the people of the United States, to 
common laborers and all consumers, more than enough to 
pay the interest on our war debt. Take a plain statement. 
Here is a laboring man that receives a dollar a day for 
three hundred days in the year. We will suppose lie re- 
- it in bills on Ohio banks, and one-half is expended 
.foods from the East. These bills, upon an average, 
are at a discount of three per cent. Then he pays four 



138 HON. JOHN SHERMAN. [chap. 

dollars and fifty cents in that case, where he pays nothing 
now. This, by all the consumers in the United States, 
would more than pay the interest on our war debt. 

Whoever has lived through the revulsions of 1816-20, 
1837-42, and 1857-60, as the writer has, and whoever re- 
members the tremendous political contests about the old 
United States banks, will rejoice that we have a stable na- 
tional currency, secured by United States bonds, and over 
which the Government has no control, except to limit the 
amount of issues. It is not to be supposed that the whole 
credit of all this belongs to Mr. Sherman. He was as- 
sisted by other able men, such as the Hon. S. P. Chase, 
and especially J. Cooke & Co. Without these Mr. 
Sherman might have been powerless, and without a man 
like Mr. Sherman on the Finance Committee of the Sen- 
ate, to lay far-reaching plans, and pilot and press them, 
one by one, through Congress, their skill would have been 
of no avail. The beauty and the wonder of the whole proc- 
ess of funding and refunding the national debt, and the 
resumption of specie payments, are that they are parts of a 
well connected and efficiently conducted scheme from the 
beginning to the end-^-a scheme thoroughly criticised and 
sifted at every step by friends, and resisted by foes, but 
urged on and carried through by one who has proved him- 
self a master of finance. One of these steps has just been 
reviewed, viz , that of clearing off a flood of local bank 
paper. 

Now, the issue of United States notes having been au- 
thorized, a bill to provide a national currency, secured by 
a pledge of United States stock, and for the circulation and 
redemption thereof, being before the Senate, the following 
amendment was offered, as an additional section, by Mr. 
Powell, of Kentuckv: 



vni.] MR. SHERMAN IN THE SENATE. 139 

" And be it further enacted, That each and every banking 
association organized under this act shall be and is hereby 
required to keep in its vaults, in gold and silver coin, at all 
times, an amount equal to at least one-fourth of the amount 
of the notes it is authorized to issue." 

This, it will be noticed, if adopted would, at that time, 
have prevented the organization of the national banks, be- 
cause there was no specie to be had. War had driven it 
out of the country. The provisions of this section required 
that amount to be kept in lawful money. 

A very cursory look through the Congressional Globe, is- 
sued at the time this bill was under consideration, will 
show that Mr. Sherman, at almost every step, was met 
with suggestions, motions, and amendments, of which the 
above is a specimen, and on him rested mainly the defense 
of the bill, and its ready amendment whenever a real fault 
or flaw was suggested, from any and every quarter. While 
Mr. Sherman's mind is characterized by remarkable firm- 
ness and promjDtness of decision, there is nothing like ob- 
stinacy about him. However deep his interest in the 
success of a measure, and however much he may have 
cherished it as a scheme of his own, he is ever open to con- 
viction. There is nothing like egotism about him. His 
only purpose seems to be to adopt the best plan, whether 
his own or another's. The character of this amendment 
of Senator Powell was clearly shown as being an attempt 
to defeat the bill. 

Mr. Sherman, never disposed to claim any credit not his 
own, did not say, as he might have done, that he had sub- 
mitted this bill to the Secretary of the Treasury, and it 
had been approved by him and every member of the Cabi- 
net, that it had the assent of the great body of the people 



14u HON. JOHN SHERMAN. 

and of many banks. He made no such claim for his com- 
mittee, even, till lie was forced to do so. 

Mr. Collamer, of Vermont, objected to the bill, upon 
the supposition that it was proposed by the Secretary of 
the Treasury. Upon this objection Mr. Sherman claimed, 
for the Finance Committee, the paternity of the bill, but 
not for himself, as he might have done, for the manner in 
which he defended it from attacks of friend and foe, would 
render it evident, that if it were not his own child, it wits 
very nearly related to him. 

Mr. Collamer's real objection was to doing away with the 
local banks, and this was just what Mr. Sherman wished 
to do. Mr. Collamer said, under this system, the national 
banks can not make money. "Then," said Mr. Sherman, 
'• they will not harm the local banks." 

Mr. Collamer says the Government will derive no bene- 
fits from these banks. To this Mr. Sherman replied by re- 
viewing his remarks on the bill to tax the circulation of 
the banks, made the day before, viz: "The Government is 
making market for its bonds by having fiscal agencies 
throuo-hout the United States, so that it may more readily 
collect its debts, and by saving one-third of the interest on 
the bonds held as security for circulation, and by seen ring- 
to the people of the United States a uniform national cur- 
rency, which can be passed from hand to hand, in all parts 
of the country, without loss by exchange, deterioration or 
alteration." 

Mr. Collamer said: "The power granted by this bill 
would render the Secretary of the Treasury a very danger- 
ous person." 

" Dangerous to himself," said Mr. Sherman. " If a man 
have power to appoint twenty to responsible positions, he 
will give offense to five hundred by disappointing them." 



YJ.U.] Mil. SHERMAN IN THE SENATE. 141 

Mr. Collamer thought the winding up of local banks 
would be a dire calamity. 

"But," said Mr. Sherman, "they are wound up every 
twenty years, and, in that time, an amount equal to their 
whole circulation is lost, in the hands of the people, and 
here is a plan by which such losses may be avoided." 

But so strong was the tide against this bill in the Senate, 
that the next day, February 10, 1863, Mr. Sherman was 
again constrained to address that body, and said: 

" Mr. President, the importance of the subject under 
consideration demands a further statement than has yet 
been made of the principles and objects of this bill. I 
wished to avoid the labor of discussing the subject, but its 
discussion seems to be necessary. I shall endeavor to con- 
dense what I have to say, for I know the time of the Sen- 
ate is precious, and 1 desire to get a vote on this bill, if 
practicable, to-day." 

Mr. Sherman proceeded, in a speech of nearly twenty- 
two closely-printed pages, octavo, to notice, first, surround- 
ing difficulties, the sources from which the bill is com- 
mended, a review of measures already adopted, viz: the 
issue of United States notes; the evils of State bank circu- 
lation, the difficulties of an exclusive circulation of Treas- 
ury notes, a review of all expedients adopted by other 
nations, as well as our own, and their evils, presents a dia- 
gram showing the effects of an over-issue of paper money. 
Then he calis attention to this bill — its desirable provisions, 
its value to the Government — a safe and convenient way to 
dispose of the State banks, a convenient agency for the 
Government, identity of interest between bankers and the 
Government, convenience of the people, the ease of detect- 
ing counterfeits, promotes a feeling of nationality, banks 



142 HON. JOHN SH HUMAN. /map. 

themselves will be benefited, place to deposit funds by col- 
lectors of revenue, etc. 

He also reviews the old United States Bank, and the 
struggle between hard money politicians and all banks, the 
adoption of the subtreasury law, the necessity of some 
agency in borrowing by a government, reviews the idea 
that interest is saved by issuing Treasury notes. Though 
surrounded with difficulties, to meet them boldly, and foil 
them honestly, will secure safety, and closes with the fol- 
lowing almost prophetic appeal : 

" Under the system now proposed, with the sanction of 
the Secretary of the Treasury, the Government pays but 
four per cent, on the amount of bonds filed in the depart- 
ment, and these banks provide a market for a greater 
quantity of bonds. The banks, under this system, will be 
the means and the medium by which the Government can 
reach the money in the hands of the people. Those who 
take the responsibility of defeating a measure of this kind, 
unless they can substitute something better in its place 
than the unlimited issue of paper money, will take a re- 
sponsibilitv that I would not for my life assume. I had 
doubts about this system ; I examined them carefully ; I 
weighed them all, and, on my own responsibility, I feel 
bound to say that, all things considered, it is the best that 
can be adopted, under the circumstances, to avoid that 
which will be inevitable destruction. 

" If this bill is defeated, and we go on upon the system 
proposed by the House of Representatives, to issue an in- 
definite quantity of paper money, without restraint or lim- 
itation, the price of every thing will rise, the produce that 
we use will rise, and the expenses of the Government will 
be largely increased. Nothing now restrains the speculat- 
ive spirit except the Senate. Unless we can devise -some 



vin.] MR. SHERMAN IN THE SENATE. 143 

permanent basis for a national currency, some wise financial 
scheme, our people will be embarked in reckless spec- 
ulation. 

"But, sir, when your United States notes depreciate, 
they carry down with them United States bonds. Some 
Senators think we ought to go on issuing these notes till 
the mere operation of supply and demand will compel the 
people to convert them into bonds. Why, sir, it is the 
history of such operations that, as the United States notes 
go down, the bonds go down. Stocks that I know to be 
worthless— inflated stocks of broken railroad corporations- 
are now selling in New York for more money than the six 
per cent, bonds of the United States, with interest payable 
in gold and silver coin. It is one of the tendencies of the 
times, and the more you inflate your currency, and derange 
matters by the issue of Government paper money, or bank 
paper money, based upon it, the more you derange mat- 
ters, and give an impetus to the present speculation. But 
if, by a wise system, you induce the local banks gradually 
to assume, as the basis of their circulation, the United 
States notes, and limit the amount of those notes (for that 
is indispensable), you will fhrnish a market for your bonds, 
by which alone you can hope to carry on the operations of 
this war. I may be like other men who have thought a 
great deal on a particular subject, I may give to this ques- 
tion an undue importance, but with me it is all-important. 
The establishment of a national currency, and of this 
as the best that has yet been devised, appears to me all- 
important. It is more important than the winning of a 
battle. In comparison with this, the fate of three million 

negroes, held as slaves in the Southern States, is utterly in- 

• 
significant. I would see them slaves for life, as their 

fathers were before them, if only we could maintain our 



144 HON. JOHN SHERMAN. 

Nationality. I would see them free, disenthralled, enfran- 
chised, on their way to the country from which they came, 
or settled in our own laud, in a climate to which they are 
adapted, or transported anywhere else, rather than see our 
nationality overthrown. I regard all these question- as en- 
tirely subordinate to this. Sir, we can not maintain our 
nationality unless we establish a sound and stable financial 
system, and, as the basis of it, we must have a sound na- 
tional currency. So it seems to me. I may be wrong, but, 
so strong is my conviction on this subject, that I believe 
the passage of this bill, by which our financial system may 
be harmonized, and by winch we shall have what has al- 
ways been desired by the statesmen of America — a sound 
national currency — is more important than any measure we 
can pass. 

"I may say to my political friends that it receives the 
sanction of every member of the administration, and par- 
ticularly the earnest sanction of the gentleman who is 
placed in charge of the Treasury Department. I will say 
to my political adversaries that it has no connection with 
party politics. It has been framed, I believe, without 
reference to any political dispute, simply to accomplish that 
which we all desire — to place our national credit on the 
surest and safest foundation. I ask them, before they re- 
cord their votes against it, at least to furnish us a better. 
Shall we go on issuing paper money, discarding and disar- 
ranging every thing? Shall we sell our bonds in the market 
for what they will bring? Great Britain did it, but. she 
established a sound national currency through the agency 
of the Bank of England before she did it ; she removed 
the restrictions from the Bank of England before she com- 
menced that system of selling her public securities. Then 
she did it. Unless you can tell me a better system, I ap- 



vin.] MR. SHERMAN IN THE SENATE. 145 

peal to friends and opponents to vote for this bill, because, 
whatever differences there may be as to the mode of ad- 
ministering the government, whatever differences there 
may be as to political questions growing out of the war, on 
the much-disputed matter of the condition of the African 
race in this country, there can be no doubt that we all 
alike are interested in preserving our national honor, our 
national credit, our national existence. If these are lost, 
what 'a sea of troubles 7 is before us! If our credit is gone, 
if our nationality is destroyed, who among us now can see 
the end of the difficulties that loom up in the future? 
Who can see the difficulties that will arise, if a boundary 
line is attempted to be drawn across this continent, be- 
tween two hostile sections ? Who can see the difficulties 
before us if, by the progress of time, our paper currency 
becomes what my friend from Kentucky yesterday said it 
was— -' worthless trash'? Then, sir, the Government will 
be subverted. No people can carry on a long war except 
with money, and you can not get money unless you have 
public faith, unless you have the means of borrowing, and 
unless the means of paying, at least the interest, shall be 
provided for by a wise and uniform system. 

" I believe that if the financial bill reported from the 
Finance Committee, and this bill, a necessary supplement, 
together with a just system establishing a sinking fund, be 
passed, we can carry on this war, even with the enormous 
burden thrown upon our people. Then let us, in addition 
to this system, practice economy. I know that sometimes 
Senators have thought I have been very captious on that 
subject, If I know my own heart, I have not been actu- 
ated by any unworthy spirit, but simply by a desire to save 
and husband the resources of the people of this country, to 
enable them to meet the great national difficulties that 



146 HON. JOHN SHERMAN. [chap. vni. 

exist. If we can only get through this strait, if we can 
see our way out of this war, upon the basis of preserving 
the Union, there is nothing that can be said too highly of 
the future of this country. With boundless resources, with 
an enterprising population, placed in the center of a great 
continent, in a temperate climate, history does not afibrd, 
and can not furnish, a parallel of our capacity. Our ex- 
ample of success will not only establish our republican form 
of go vera men t, but it will spread the spirit of our repub- 
lican institutions over lands that are yet living under kings 
and nobles and despots. Sir, I therefore do press upon 
the attention of the Senate this important bill." 

The whole movement of displacing the local State banks, 
by the national bank system, was one of the grand results 
of the war to suppress rebellion, as well as an important 
agency in its success, and Mr. Sherman was the man 
whose force of character, and will, and foresight, carried it 
through. It may be said that Mr. Sherman was greatly 
indebted to Mr. Chase and Jay Cooke & Co., and that he 
never would have succeeded but for them. True, the skill 
and efforts of such men as these, and particularly the her- 
culean labors of Jay Cooke & Co., were essential, and 
should never be forgotten or underrated. But what could 
Mr. Cooke have done without the agency of the national 
banks? Little or nothing. Mr. Sherman's wisdom con- 
sisted in using all the wise suggestions of others, together 
with the useful lessons of history, and rejecting advice that 
was worthless. It was his part to urge the necessary meas- 
ures through Congress. This he did, and others did not. 



CHAPTER IX. 

RESUMPTION CONTEMPLATED. 

The grand and crowning work of Mr. Sherman, in pop- 
ular estimation, has been the resumption of specie pay- 
ments. To do justice to the subject of this sketch, it will 
be necessary to recount the steps by which it has been 
achieved. In this may be found a lesson for a young man 
in ordering his personal affairs, or a statesman in conduct- 
ing those of the public. Mr. Sherman may be said to 
have been shaping his course unconsciously, to this very 
end, from his first entrance into Congress. It seemed to be 
instinctive with him. When placed at the head of the 
Committee of Ways and Means, he began actively to make 
his first preparation, as though it devolved on him to pro- 
vide for all the wants and necessities of the nation. His 
first move was to provide for the debt, by the issue of 
stock to the amount of $25,000,000. This bill became 
a law February 8, 1861, the Morrill tariff bill having 
failed to pass the Senate. 

The next move was made on February 13, 1862, in 
passing the legal-tender act, when Mr. Sherman showed the 
necessity of that feature of the bill. By this, $150,000,000 
of Treasury notes were authorized and made a legal tender. 
On January 10, 1863, the law was forcibly advocated for 
the taxation of the circulation of State banks, in order 

(147) 



U8 HON. JOHN SHERMAN. [CHAP. 

to do away with them and make room for a national cur- 
rency — a step more important than he then knew of towards 
resumption. On the 9th of February, 1865, another step 
was taken, viz., the organization of the national bank sys- 
tem, which was most earnestly advocated by Mr. Sherman 
in a speech of unusual length. On the 27th he made 
another speech, showing the necessity, on the part of the 
Government, of keeping the value of lawful money as 
nearly as possible to that of gold, closing with these words: 
"Our duty is dry, hard, exacting, but it will be more 
cheerful when, in the future, our self-sacrificing patriotism, 
in this great crisis, shall have enabled our country to enter 
upon its new career, without a stain upon its financial 
honor." The next move of Mr. Sherman towards keeping 
as near as possible to the gold standard, was, by a most 
cheering speech already quoted, on a bill to provide ways 
and means to support the Government, in the Senate, 
April 9, 1866. 

On May 22d of that year, was made a powerful effort to 
fund the debt of the United States at a lower rate of in- 
terest, by issuing the ten-forties, January 27, 1867. Mr. 
Sherman, with earnestness, and in a speech of remarkable 
clearness, settled the question of a protective tariff', and 
urged an increase of revenue from imports, thus bringing 
the interest down, and the revenue up; looking still to 
the grand result. December 17th of the same year the 
debt was $2,501,205,751.75, as exhibited in a Senate 
report. Mr. Sherman's plan is always to let the people 
know exactly how they stand, to make the income as 
great as possible, without oppressive taxation, and the 
expenses as light as possible without injury to the service. 
In February, 1868, another move was made towards fund- 
ing the debt, at five per cent., when Mr. Sherman made 



ix.] RESUMPTION CONTEMPLATED. 149 

his noted argument to show that it was possible the five- 
twenty bonds might be held to be payable in greenbacks, 
provided no more were issued ; but afterwards more were 
issued, and then Mr. Sherman's argument told the other- 
way. On January 27, 1869, Mr. Sherman had a con- 
troversy with Senator Morton upon an effort made towards 
specie payments, by legalizing contracts payable in gold. 
He showed that specie payments might then have been 
resumed by increasing the bonded debt $100,000,000, and 
the interest $5,000,000, if the Government and the banks 
only were concerned ; but then it would bear hard on the 
people to resume, and this he was unwilling to favor. He 
was not so cruel as some have claimed. He could put off 
resumption, ardently as he desired it, to spare the people 
from certain suffering. On the 27th of February, 1869, 
Mr. Sherman was exceedingly earnest, urging through the 
Senate a bill to strengthen the public credit, and proposed 
the following methods: 1. To legalize gold contracts; 

2. To set aside $140,000,000 to redeem the public debt; 

3. To tie the fate of the greenbacks to that of the bonds; 

4. To authorize free banking. The House bill before the 
Senate proposed to make all obligations payable in gold, 
except where it was otherwise specially provided for, and 
though Mr. Sherman's opinion was that the five-twenties 
could be paid in greenbacks, from motives of policy he 
thought it better to say they should be paid in gold. This 
was advocated and disposed of, to make way for another 
bill soon to be offered, and another step to be taken 
towards specie payments. 

A month later, February 28, 1870, the untiring and 
ever-persistent financier addressed the Senate in ii long 
speech upon another bill, looking towards specie payments — 
" a bill to authorize the refunding and consolidation of the 



150 HON. JOHN SHERMAN. [chap. 

national debt, to extend banking facilities, and to establish 
specie payments." This was the purpose. The measures 
proposed were, the form of bonds into which it was pro- 
posed to fund — i. e. , of three classes : ten-twenties, fifteen- 
thirties, and twenty-forties — the necessary agencies to be 
employed, the reduction and ultimate payment of the debt, 
and some changes in our banking laws. 

After giving the history of successive steps in the opera- 
tions of a financial character since the beginning of the 
war, in his remarks on this bill, which have already been 
narrated in these pages, he proceeds to state some circum- 
stances that have not been noted as yet, and one is remark- 
able as showing his readiness to acknowledge an error 
when he makes one, and also how few he makes. 

"Now, Mr. President," said Mr. Sherman, "there is no 
doubt that during and since the war we made some errors, 
and were guilty of some departures from true financial 
principles. I say this in all kindness, because I do not 
mean to evade my share of the responsibility, and I now r 
wish to point out some of those errors. In the fall of 1864, 
a security of a new character was issued that I think was 
not authorized by law. I refer to the seven-thirty bonds, 
which were issued, running three years, with the right, on 
the part of the holder, at the end of three years, to convert 
them into five-twenty bonds, payable, principal and interest, 
in gold. At the time I thought, and I still think, that by 
a fair construction of the law as it then stood, there was no 
power in the Secretary of the Treasury to give the holder 
of those seven-thirties the right to fund them in five- 
twenty bonds. It was a departure from the financial policy 
of the, Government, to provide only for short loans. The 
result was, at the close of the war, to continue a loan, bear- 
ing six per cent, in gold, for a longer period than ws 



as 



ix.] • RESUMPTION CONTEMPLATED. 151 

authorized by law. * By referring to the act of June 30, 
1864, under which this loan was made, you will see that 
the option was given to the Secretary of the Treasury to 
issue either five-twenty bonds or seven -thirty notes. Either 
of these securities might be issued at his option ; but there 
is no authority in the law of June 30, 1864, allowing 
their exchange by holders of the notes. The amount of' 
notes issued in the fall of 1864 was only $700,780,250; all 
the rest of our indebtedness at that time was in currency 
securities." 

For this, however, Mr. Sherman did not share in the 
responsibility. 

"The next error which affected our financial operations, 
and affects them now [1870], is the error made after the 
war was over, by the Secretary, of continuing this form of 
oppressive securities. After the war was over, and after 
the last rebel had laid down his arms, there were issued 
about $600,000,000 of seven-thirty notes, convertible, at 
the pleasure of the holder, into five-twenty bonds. There 
is now no doubt that if, immediately after the war was 
over, a loan bearing a lower rate of interest, payable in 
gold — a five per cent, ten-forty bond, for instance — had 
been put upon the market, all the floating debt of the 
United States might have been converted into it. On the 
1st of March, 1865, when the war was practically at an 
end, the amount of gold-bearing bonds did not much exceed 
one billion dollars, and all the rest of our indebtedness was 
in currency securities. But this was mistaken action. The 
currency securities were converted into a six per cent, five- 
twenty bond, and the period of payment was postponed 
eight years by allowing their conversion at the end of 
three years." 



152 HON. JOHN SHERMAN. [char 

Nor of this does Mr. Sherman take any part of the 
responsibility, but of the next he does. 

" But, Mr. President, Congress itself was guilty of some 
errors, and one or two very great omissions in financial 
legislation, after the war was over. The most unfortunate 
one was the act of April 12, 1866. By this act Con- 
gress authorized the Secretary of the Treasury to fund all 
the floating indebtedness of the United States, the com- 
pound interest notes, the five per cent, notes, the temporary 
loan certificates, and all the then floating debt, into six per 
cent, gold bonds, or into any form of bond authorized by- 
previous acts, which covered, as a matter of course, the six 
per cent, five-twenty bonds. 

" Thus, by a general sweeping provision contained in this 
act, was legalized and authorized the conversion of the 
whole currency debt, except United States notes, into five- 
twenty bonds, thus swelling largely the five-twenties. 
Whatever opinion may have been entertained as to the 
state of our finances in 1865, there can be no doubt that on 
the 12th of April, 1866, it was not wise, not politic, to fund 
the debt into a six per cent. bond. The effect of this legis- 
lation was at once to sever the bond from the note. All 
forms of indebtedness except the notes were allowed to be 
funded into bonds. This at once checked the appreciation 
of the notes. Gold had greatly lowered in price, till in 
April, 1866, when this act was passed, it was only worth 
twenty-five and one-half per cent, premium; but, from the 
passage of this act, it immediately rose, and in July aver- 
aged fifty per cent. For years afterward gold never 
reached the minimum of twenty-five per cent., but ad- 
vanced, fluctuating backward and forward. Paper money 
was then entirely detached from the rest of the debt of the 
United States, and became of less market value than any 



pc.] RESUMPTION CONTEMPLATED. 153 

other form of our securities. During the past year, under 
a different policy, the currency has reached much nearer 
the par of gold than before. * * * This act, and the 
failure of Congress to provide any mode for redeeming or 
retiring the greenback?, and afterwards the repeal of even 
the limited authority granted to the Secretary of the Treas- 
ury to retire greenbacks, undoubtedly kept our notes de- 
preciated from day to day, fluctuating in value. 

" Mr. President, another great error which, I think, we 
must all admit Congress has been guilty of, is the long de- 
lay in passing a bill to provide for the funding of the pub- 
lic debt. There has been no time during the last three 
years when large masses of the existing debt could not 
have been funded into five per cent, bonds, and the actual 
saving by this would have been very large indeed. 

"The first funding bill, of April, 1866— five per cent, 
ten-forty bonds — was defeated by amendments. The sec- 
ond, December, 1867— a five per cent, domestic and four 
and a half foreign loan— was defeated by the pocket veto 
of President Johnson, and that of the previous session by 
innumerable conflicting opinions." 

Such is a specimen of some of the difficulties Mr. Sher- 
man had to contend with in his progress towards resump- 
tion. In the above is clearly seen the reason of his urging 
what he conceived to be the legal right to pay five-twenties 
in greenbacks, viz : in order to keep them as near to the 
bonds as possible in value, and, therefore, nearer gold. In 
this bill was introduced a provision that four per cent, 
bonds might be paid for in greenbacks. Another difficulty 
he met was the objection of the national banks. On this 
bill Mr. Sherman made two speeches, occupying forty-four 
closely-printed octavo pages, and, besides that, was on the 



154 HON. JOHN SHERMAN. [chap. ix. 

floor of the Senate, with remarks, explanations, etc., eighty 
times. 

Let any one look through the Congressional Globe, and 
then see if he can say, in his conscience, that it is "a for- 
tuitous concurrence " of circumstances that has enabled 
Mr. Sherman to bring about resumption. Weary days and 
anxious nights, hard study and indefatigable work, for 
nearly nine years already, have been required to prepare 
the way. When Stevenson built the tubular bridge over 
the Menai Straits, it may have seemed easy for him to lie 
on the bank", smoke his cigar, and see the great iron tube, 
five hundred feet long, prepared for a railroad track, go 
into its place, but it must have tasked his genius to the 
utmost to have planned all this beforehand. The difference 
is, Mr. Stevenson had men to work with that would obey ; 
Mr. Sherman had not. 

But we have not reached resumption yet. This funding 
bill passed July 14, 1870. The great panic of 1873 is to 
come yet, and nine more years of hard toil, deep study, 
and earnest talk. 



CHAPTER X. 

PREPARING FOR RESUMPTION. 

The Senate had under consideration a bill from the 
House to amend an act to provide ways and means to sup- 
port the Government, and so to extend it as to authorize 
the Secretary of the Treasury, at his discretion, to receive 
any Treasury notes, or other obligations issued under any 
act of Congress, whether bearing interest or not, in ex- 
change for any description of bonds authorized by that act, 
either in the United States or elsewhere, to such an 
amount, in such a manner, and at such rates as he may 
think advisable, for lawful money of the United States, or 
for any Treasury notes, certificates of indebtedness, etc., 
the proceeds to be used to retire the Treasury notes, to the 
amount of $10,000,000 in six months, and $4,000,000 per 
month thereafter. Here Mr. Sherman, by his wise fore- 
sight, began to "put up the fence " to avoid a crash. He 
says: 

" If Senators will read the bill, they will find that it con- 
fers on the Secretary of the Treasury greater powers than 
have ever been conferred, since the formation of the Gov- 
ernment, upon any Secretary of the Treasury. This bill 
authorizes the Secretary of the Treasury to sell any kind of 
bonds, without limit, except as to the rate of interest. It 
does not limit him to anv form of security. The security 

(155) 



l ...; HON. JOHN SHEEMAN. [chap. 

may run for any period within forty years. He may sell 
the securities at less than par, without limitation as to rale. 
He may sell them in any form he chooses. He may put 
them in form of Treasury notes or bonds, the interest paya- 
ble in gold or in paper money. He may undertake, under 
the provision of this bill, to fund the whole debt of the 
United States. The only limit as to the amount is the 
debt itself, now $2,700,000,000." 

Mr. Sherman could see no necessity for conferring this 
extraordinary power, and did not think it wise to do so. 
The precedent would be bad, and changes in revenue 
might occur that would render it a serious inconvenience. 
While the House had stipulated that only $4,000,000 of 
legal tenders should be destroyed each month, yet there 
was nothing in the bill to prevent the Secretary of the 
Treasury from hoarding them, and thus causing a con- 
traction of the circulation, which the House of Representa- 
tives intended to prevent. He was inclined to believe that 
was the Secretary's purpose. This is indicated by the ac- 
cumulating balances in the Treasury. 

Here is a passage in Senator Sherman's remarks on this 
subject, to which the attention of all parties is especially 
invited. It shows the spirit of the man, that he knew 
whereof he spoke, that in this whole scheme of finance he 
understood himself, his subject, and the country thoroughly. 
In reading over these remarks made in the Senate one year 
alter the war closed, it seems more like reading the history 
made on January 1st, 1879, than a prediction. 

Mr. Sherman said: " I repeat, I do not wish to call in 
question the integrity of the Secretary of the Treasury. 
The Senator interjects, by saying, 'we must look ahead.' 
There is just the difference between him and me. I say 
the future for this country is hopeful, buoyant, joyous. 



x -j PREPARING FOR RESUMPTION. 157 

We shall not have to beg of foreign nations, or even of 
our own people, money within two or three years. Our 
national debt' will be eagerly sought for, I have no doubt. 
I take a hopeful view of the future. I do not wish now 
to cripple the industry of the country, by adopting the 
policy of the Secretary of the Treasury, as he calls it, by 
reducing the currency, by crippling the operations of the 
Government, when I think that under the probability of 
affairs in the future, all this debt will take care of itself. 
I believe that if the Secretary of the Treasury would do 
nothing in the world, except simply sit in his chair, meet 
the accruing indebtedness, and issue his treasury warrants, 
this debt will take care of itself, and will fund itself at four 
or five per cent, before long." 

The writer believes that many will be surprised to learn 
that Secretary Sherman said the following, in the United 
States Senate, on April 6th, 1866; 

"In my judgment, the amount of legal tenders now ^out- 
standing, is not too much for the present condition of the 
country! I expect to come back to specie payments, and 
I expect to see gold approach the level and standard of 
our paper money, without any material reduction of our 
currency. Our currency now is less than the currency of 
England or France, according to the tables we have. Our 
whole currency now is $704,000,000, excluding the inter- 
est-bearing legal tenders, which do not enter at all into it, 
and which carl not be found, and including bank circula- 
tions of every kind. Four hundred and fifty millions of it 
consist of United States notes and fractional currency. 
Then there are over $250,000,000 of bank currency, in- 
cluding the notes of State banks, outstanding, which are 
being rapidly retired. The limit of the national bank cur- 
rency is $300,000,000, so that the whole currency can not 



158 HON. JOHN SHERMAN. [chap, 

exceed $750,000,000. I do not consider the compound in- 
terest notes as any thing, because they are not in circula- 
tion." 

Again, he says: "In regard to going back to specie 
payments, when did ever a nation travel toward specie 
payment, as rapidly as this country has done, without a 
reduction of the currency? Here is a significant fact, that 
when gold was 280, our currency was $550,000,000;* and 
now, when our currency is over $700,000,000, gold is 130, 
and is -going down, and down, and no power in this world 
can prevent its going down. This fact shows that the 
mere amount of legal tender outstanding does not affect 
the value of gold." 

It may have been no great trick to resume sj^ecie pay- 
ment. Others thought it would be; Mr. Sherman thought 
and believed it would not, He said so in his speech. 
This was not made up after resumption, but, according to 
the Congressional Globe, was said in the Senate nearly thir- 
teen years before he could persuade Congress to authorize 
it. It was either an acute guess, or remarkable presci- 
ence. But if it was a guess, it was one of a long proces- 
sion, and every one has been unerringly verified. 

This bill was passed against Mr. Sherman's vote, and 
when 844,000,000 legal tenders had been retired, the na- 
tion cried, Enough. The law was repealed January 9, 
1868, and the Senator triumphed. 

In December, 1867, Mr. Sherman, as Chairman of the 
Finance Committee, made a report on the following sub- 
jects referred to them in the President's message: 

1. The funding of the public debt, and as an incident 
to it, the redemption of the five-twenty bonds. 

2. The taxation, State and national, of the public secu- 
rities. 



X.] PREPARING FOR RESUMPTION. 130 

3. The redemption and conversion of the United States 
notes, or legal-tender currency. 

This report is alluded to here for the purpose of stating 
that it is the report of a committee, and not a speech of 
Mr. Sherman's. It contains an intimation that there is a 
redundant currency. But Mr. Sherman did not think so. 

This report, while it intimates that the five-twenties 
might be understood to be payable in legal tenders, does 
not decide the question. But it expresses the opinion of 
the committee, and not Mr. Sherman. As to the amount 
of legal tenders desirable for the business of the country, 
we have seen that he disagreed with the committee. As 
to how the five-twenty bonds were payable, his view was, 
that they might be paid in legal tenders if they, the legal 
tenders, were not to be issued in excess of $450,000,000. 

As in this, Mr. Sherman has been supposed by some to 
have leaned to the greenback theory, and as it is the pur- 
pose of these pages to hide nothing of his course, but to 
present him just as he is, and as his argument on this sub- 
ject is a fair specimen of clear, logical reasoning, and 
shows his readiness to yield to truth and logic, it is here 
presented. This is due to Mr. Sherman, to prevent a mis- 
interpretation of his views to his disadvantage. Mr. Sher- 
man said: 

"Mr. President: The question is, whether the bonds 
issued since the legal-tender act took effect, may be paid in 
legal tenders. Upon this question, I may as well state now, 
the Committee on Finance do not pass any opinion, and 
in the observations I make on this point, I speak for my- 
self, not for them. They deem the occasion a proper one 
to offer an exchange to the public creditor, leaving for the 
future to settle the result of a refusal. The act which pro- 
vided for the legal tenders, also provided for the five- 



163 HOX. JOHN SHERMAN. [chap. 

twenty bonds. However, the notes were issued before the 
bonds; the notes were all outstanding before a single bond 
was issued. Now the legal-tender clause provides that — 
' such notes herein authorized, shall be receivable in pay- 
ment of all taxes, internal duties, excises, debts and de- 
mands of every kind, due to the United States, except 
duties on imports, and of all claims and demands against 
the United States, of every kind whatsoever, except for in- 
terest upon bonds and notes, which shall be paid in coin, 
and shall also be lawful money and a legal tender in pay- 
ment of all debts, public and private, within the United 
States, except duties on imports and interest as aforesaid.' 

"Does not this act in so many words declare that while 
coin shall be paid for the interest of the public debt, yet 
the notes provided by this act shall be a lawful tender in 
payment of all debts ? 

" It is admitted that if the matter stood on the legal- 
tender clause, there would be no doubt — there could be no 
resisting the conclusion — that the legal contract between the 
Government and the bond-holder was that the interest 
should be paid in coin, and the principal should be paid in 
the legal-tenders specified by this act." 

There were other provisions of this law which led Mr. 
Sherman to conclude that it could not have been the ex- 
pectation of Congress that these bonds should be paid oth- 
erwise than in coin. For instance, the issue of legal-tenders 
was restricted to $150,000,000, which could never have 
been expected to be enough to redeem 8500,000,000 of 
bonds. 

"But no bonds were issued under this act. Every one 
of the restrictions as to the amount of legal-tenders was 
repealed before the bonds were negotiated." None could 
be sold. 



x.] PREPARING FOP. RESUMPTION. 161 

" After long consideration — for the subject was debated 
over and over again — the Committee on Finance agreed 
upon the act of March, 1863. That act repealed the limit 
as to the amount of circulation, and raised it to $450,- 
000,000. It also took away the right to convert" (i. e., 
greenbacks into five-twenties), "which the' Secretary said 
was the other restriction that prevented the sale of the 
bonds, and limited the right of the holders to convert the 
outstanding greenbacks to the first of July then next. By 
this legislation the limitations which prevented the sale of 
the first five-twenty bonds were repealed, and then, for the 
first time, this loan was taken. Then it was that an 
agency was organized, and means were taken to spread the 
bonds over the country, and they were sold; but they were 
not sold until these restrictions were removed, and they 
were sold upon a basis of $450,000,000 without the right 
of redemption (conversion?), with no privilege whatever, 
except that of being receivable for Government taxes. 
That was the state of the law upon which the legal right 
of the holders of the five-twenties rests. 

"It is true that various agents of the Government stated 
that these bonds would be paid in coin, and that creates 
the embarrassment in regard to this matter; that always 
affected my mind more than any legal difficulty in the way, 
because I think the nation is not only bound to observe the 
law, but it is bound to pay a reasonable degree of respect 
to the representations made at the time these bonds were 
sold. It is true as a matter of law that no agent could 
vary the contract, that every man who bought these bonds 
bought them upon the face of the law, and not upon the 
mere advertisements of agents. Still every wise legislator 
would consider the extent of those representations, and 
how far thev affected t lie public mind. 

14 ' ' 



1G2 HON. JOHN SHERMAN. [char 

"Mr. President, I will not follow this matter further, 
because it is not necessary for my argument that I should 
do so ; but I submit to Senators whether the presentation 
of the law and the facts in regard to the five-twenty loan 
does not raise a reasonable doubt upon which honest men 
may disagree. All that is necessary for my argument, is 
to show that there is such a doubt as to the manner of 
paying these bonds. If such doubt exists, it ought to be 
removed, or some other bond substituted, in order that this 
unsettled question may not poison the public credit." 

The law proposed by the Committee was a compromise 
to remove this doubt. To offer ten-forty bonds at five per 
cent., payable, principal and interest, in coin, exempt from 
taxation ; to provide for sinking the public debt $135,- 
000,000 a year ; to receive six per cent, five-twenties for 
the ten-forties, and provide for the conversion of green- 
backs into five per cents, until resumption should take 
place. 

There were various reasons why Mr. Sherman should 
have made this speech at that time without imputing to 
him any disposition to pander to the greenback furor. 

1. It was desirable that holders of five-twenties should 
understand precisely how doubtful their claim to be paid 
in coin might be, in order to induce them voluntarily to 
exchange them for ten-forties, as well as for greenbacks. 

2. It was important to allay in the public mind any irri- 
tation, or envy that might exist, against the holders of the 
six per cent, bonds, as receiving an exorbitant interest, 
above what others could get. 

3. It was important to squelch at once the rising clamor 
for an unlimited issue of greenbacks. 

The following will show the manner in which the favor- 
ers of an unlimited issue of legal tenders were met : 



x .] PREPARING FOR RESUMPTION. 103 

" The second mode of paying off the five-twenty bonds 
is proposed by partisans, and consists in a new issue of 
greenbacks. This is a plausible and dangerous device. 
No man can justify it. Why? Because the very acts 
under which these bonds were issued contain limitations 
which we can not and dare not exceed. These limitations 
were put in every loan act, and finally embodied in a 
guaranty, in the act of June 30, 1864, to which I will now 
refer. The limitation contained in the last preceding act, 
that of March 3, 1863, in force when the five-twenties 
were negotiated, was $450,000,000. The act of June 30, 
1864, modified and repeated this limitation as follows: 

"< Nor shall the total amount of United States notes 
issued or to be issued ever exceed $400,000,000, and such 
additional sum, not exceeding $50,000,000, as may be 
temporarily required for the redemption of the temporary 
loan.' 

"This limitation upon the amount of greenbacks was 
always a part of the loan laws, and why? Because the 
amount of these notes issued, would regulate and fix the 
value of the bonds themselves. In all the loan acts, there- 
fore, the amount of greenbacks issued from time to time 
was limited by law, and that limitation was a part of the 
contract under which the bonds were issued, and hence any 
proposition which looks to an increase of the legal tenders, 
with a view, by this increase, to pay off the five-twenties, 
would be a plain and palpable violation of a public en- 
gagement. Just as much as would be a clipping of the 
coin, or, to follow the example of the middle ages, a debase- 
ment of the coin. Every additional greenback issued tends 
to depreciate the value of the security, and, therefore, as 
the law itself limits the amount, it must be complied with 
whatever is the consequence. 



164 HON. JOHN SHERMAN. [chap. 

"I take it, then, that no proposition will ever receive 
the sanction of Congress in the face of this law, pro- 
viding that the five-twenties shall be redeemed with any 
other notes than those in existence at the time they were sold; 
that any proposition of that kind would be dishonorable to 
the country, and dishonorable to any one who seriously 
proposed and advocated it. It would be to create a depre- 
ciated currency in order to evade the payment of an honest 
debt." 

Here is not a syllable of pandering to those who would 
issue dishonest money. Mr. Sherman believed that the 
five-twenties were payable in legal tenders already issued, 
and was not afraid to say so, and it was right for the hold- 
ers to know his views. Of such an amount of greenbacks, 
Mr. Sherman was not afraid, for he had said two years be- 
fore, they were as good as gold, which was realized eleven 
years later. 

N. B. — It appears from the Cincinnati Gazette, of Octo- 
ber 2, 1879, that opponents are still quoting Mr. Sher- 
man's argument, that five-twenties are payable in legal 
tenders, and by the friendly remarks of that paper it would 
seem that his position is but partially understood : 

1. Mr Sherman never voted for any proposition to pay 
the five-twenties in greenbacks, but always the reverse. 

2. One motive in expressing his views was to give the 
bond-holder notice that if the matter were to come into 
court, the demand for coin might not be sustained. 

3. Another reason was to keep up, as much as possible, 
the value of the legal tenders, and, if practicable, to keep 
them even with the bonds. 

4. It is quite probable, if the provision to convert legal 
tenders into five -twenties had been restored after the war, 
he might have so voted, but its repeal had so distanced the 



x.] PREPARING FOR RESUMPTION. 1G5 

value of the bonds and the legal tenders, that he did not 
deem it just to insist on his views. 

5. Mr Sherman always considered the legal tenders as 
due and payable in coin, before any of the bonds should be 
paid. The five-twenty bonds were a loan on interest, and 
the Government was allowed twenty years to pay them in ; 
but the greenbacks were a forced loan, without interest, 
payable in coin on demand. He therefore considered that 
in law, and equity, and honor, we were bound to pay the 
first. 

6. It is said Mr. Sherman changed his opinion. But 
when? Just as soon as the Government issued a dollar 
in legal tenders beyond the stipulated $450,000,000. He 
then considered the covenant violated, and all payable in 
coin; and this is just what he has done. He never favored 
paying the bonds in depreciated paper. 



CHAPTER XI. 

REVENUES AND EXPENSES. 

At the very time that Mr. Sherman was so devoting his 
energies to the matter of reducing expenses, as to excite 
wonder how the man could accomplish so much, even if he 
had but one line of thought to pursue, one subject to study, 
one end to accomplish, he was dealing heavy blows at the 
other side of our mountain of debt. While he w T as try- 
ing to reduce the people's burden, by lightening the debt, 
he was laboring to accomplish the same thing, by reducing 
the taxes. One thing in him is peculiar, but very sat- 
isfactory. In the time of President Buchanan, w T hen 
the nation was running in debt at the rate of about 
$16,000,000 a year for current expenses, it w T as rarely 
stated. But Mr. Sherman, ever since he was at the head 
of the Committee of Ways and Means, has not failed 
again and again to tell us how much we owe, how much 
we have paid, and how much must be paid in a given 
time, and how much there is to do it with. 

Hence, on the 23d of May, 1870, while the herculean 
labors of the funding bill were on his mind and on his 
heart, we find him reviewing receipts and expenditures, in 
order to a reduction of taxes. The people of this country 
scarcely realize how much they are indebted to Mr. Sher- 
man for accomplishing so much in the way of reducing 

(166) 



chap, xi.] REVENUES AND EXPENSES. 107 

taxes previous to the panic of 1873. But his own words 
will explain it better than the compiler can. 

The Senate, as in Committee of the Whole, having under 
consideration the bill making appropriations for the legis- 
lative, executive, and judicial expenses for the year ending 
June 30, 1871, Mr. Sherman said: 

"Mr. President: This appropriation bill is the first of 
a series that will bring before us every branch of the ex- 
penditures of the National Government. It may be well 
before we enter into their details to take a general view 
of our expenditures, and of such measures of taxation as 
will be necessary to raise the vast sums about to be appro- 
priated. Taxes and appropriations are inseparably asso- 
ciated. They are the painful and the pleasing sides of 
financial legislation. If to appropriate was the ' be-all and 
end-air of this and kindred bills, it would be the most 
gratifying employment in the world. We could indulge 
in the luxuries of art and the fancies of statesmanship ; 
we could erect temples for custom-houses, and cover the 
ocean with our subsidized steamers ; we could increase our 
salaries, and buy all the islands contiguous to our conti- 
nent. But, unfortunately, we can only appropriate what 
we first collect by taxation; and taxation is a painful 
process at best in its nature, unequal, and generally inflict- 
ing more injury upon the individual than it confers bene- 
fit upon the people. Every appropriation bill is a tax bill, 
and every item added is a draft upon the earnings and la- 
bor of our citizens, to which is superadded the cost of col- 
lection. If the money is borrowed, then interest is added, 
and interest is as consuming to the resources of a nation 
as to those of an individual. It never re?ts nor sleeps." 

Upon the above passage it may be remarked, that as to 
style it is a somewhat higher flight than the Secretary 



108 HON. JOHN .SHERMAN. [chap. 

usually takes, and shows that if the energies of his capa- 
cious intellect, the unerring precision of his retentive mem- 
ory, the ceaseless activity of his untiring frame, and the 
relentless power of his unbending will had been directed 
to other branches, as they have been to finance, he might 
have achieved equal distinction. But then, where has 
there been, in all the ages past, one that could have de- 
vised schemes, or selected from those suggested by others, 
such as were feasible, and so instructed and controlled 
the heterogeneous minds of the representatives of forty 
millions of people as to carry them into effect? There 
have been many eminent statesmen, men of science and 
art, orators and poets, but only one John Sherman the 
financier. 

Another remark may be made on this paragraph. It 
manifests a habit of looking at both sides of a question. 
There must be money enough collected to pay all that is 
due, and as fast as due it must be expended as economi- 
cally and wisely as possible, and collected as judiciously as 
might be, so as to make the burdens as light as might be. 
Therefore he must keep both eyes open, one upon the 
gathering of money and the other upon paying it out. 
These thoughts also show the humanity and tenderness of 
the man. This evidently is not from the apprehension of 
unpopularity at home, and of losing votes thereby if the 
taxation 'should be greater than would be needed, but 
simply a regard for the feelings of the people. He knows 
that the pocket nerve is a very sensitive one, and he dis- 
likes to disturb it. Mr. Sherman is no actor, does not say 
one thing and mean another, but says and acts out just 
what he feels, as he did when he threw the wafers in the 
Congressman's face, or else keeps it to himself; commonly 
the latter. It is not strange that he should feel the svm- 



xi.] REVENUES AND EXPENSES. 169 

ftathy expressed here, but it is not usual for him to say 
what he feels. 

The main purpose of this statement is to let the people 
know precisely what has to be done, that as far as practi- 
cable they may be willing to do it. He states first the es- 
timates made for the year 1871-72, which it is well for us 
to keep in memory: 

Civil service and miscellaneous . $ 60,000,000 

Pensions and Indians . . 86,000,000 

War Department . . . 50,000,000 

Navv Department . . . 18,000,000 

Interest on public debt . • 127,000,000 

Total . . . . $291,000,000 

Add to this the one per cent, required for the sinking 
fund, it is $315,000,000. He then takes a careful view, 
both of the estimates and expenditures, and of the sources 
of revenue, and says that the revenue for the next year 
will be $393,000,000, that is $78,000,000 above the needs 
of the Government, and also: "What shall be done with 
this surplus? Is it better to repeal and diminish the taxes 
or to maintain them at their present position, with a view 
to the reduction of the public debt?" 

"I see no object," he says, "in accumulating surplus 
funds, because they are always a temptation to extravagant 
expenditures. 

" A surplus revenue could only be used for a more rapid 
reduction of the public debt. It might strengthen the 
power of the Secretary of the Treasury to reduce the in- 
terest of the debt. These are objects of high public im- 
portance, but, in my opinion, it is now more important to 
relieve our people from burdensome taxation. The money 



170 HON. JOHN SHERMAN. [chap. 

is more valuable to the tax-payers, in the multiplied 
business of a new and vast country like ours, than it is to 
the National Government. The large surplus now on hand, 
together with the fixed provision for the reduction of the 
debt, contained in the funding bill, will enable us to re- 
duce the rate of interest, and gradually pay the principal, 
without continuing the drain of taxation upon our people. 
We point with pride to the vast sums they have freely and 
voluntarily paid, levied by themselves during and since 
the war. They have borne not only with patience, but with 
patriotic alacrity, a burden of taxation without an ex- 
ample in history." 

Then Mr. Sherman recounts the reductions that have 
been made in taxes since the close of the war, viz: 

In 1866 ..".-..'.$ 65,000,000 
In 1867 .... 40,000,000 

In 1868 .... 68,000,000 
And now proposes additional 78,000,000 



Total .... 8251,000,000 

Mr. Sherman's idea about the levy of the tax is; that it 
must come mainly from import duties, and from internal 
revenue, and he would abolish all but the tax on spirits, 
tobacco, fermented liquors, larger stamps, and a small in- 
come tax. The main part of his argument, at this time, 
was to retain the income tax, as being the only tax the 
United States will now levy upon property, the rest being 
on consumption. 

An interesting discussion took place in the Senate Janu- 
ary 4, 1871, in which Mr. Sherman participated, that has 
since become of considerable interest in the matter of civil 
service reform. Senator Trumbull offered a motion, which 



XL] REVENUES AND EXPENSES. 171 

was referred to the Judiciary Committee, and an act, re- 
ported as follows: 

That hereafter it shall be unlawful for any member of 
either House of Congress, or Delegate from a Territory, 
verbally or in writing, to solicit, recommend or advise the 
President of the United States, or any head of a Depart- 
ment, or of any bureau thereof, to appoint any person to 
office or employment, etc. 

Mr. Sherman said: "I have thought a good deal of this 
bill since it was under discussion at the last session of Con- 
gress. At first my impressions were against it, simply on 
the ground that it changed the established customs of the 
country, since the foundation of the Government; but the 
more I have reflected upon it, the more I see that it is 
necessary, not only to relieve ourselves, but to relieve the 
President from the embarrassment of his position. . . . 

' ' I have regarded this measure for the last year, as being 
not a complete civil service reform in itself, but as being 
an entering wedge, indispensably necessary to bring about 
civil service reform." 

Mr. Morton opposed it as being unconstitutional. Mr. 
Conkling also opposed it. The result of this discussion 
was, the introduction, by Senator Schurz, of a bill for civil 
service reform. This bill, if after it had passed it could have 
been enforced, would have done a vast deal toward re- 
ducing the public burdens. If a man once appointed to 
office could hold it during good behavior, he could afford 
to do it for one-half the pay at most, that is now given, 
and would be less likely to be dishonest. Men on small 
incomes are less likely to commit fraud than on large. 
There would also be much less time spent in office-seeking, 
less corruption at elections, and office-holding would be 
much more honorable than now. A thorough-going civil 



172 HON. JOHN SHERMAN. [chap, 

service reform would save to the people of this country 
vast amounts of money, and a great many other things. 
Frequent changes render high salaries necessary, and high 
salaries cause a universal scramble for office. Let reform 
come speedily. 

On January 9, 1871, the subject of revising the laws re- 
lating to the mints, assay offices, and coinage of the United 
States, being before the Senate as in committee of the 
whole, on amendment of the Committee on Finance, it was 
proposed to charge three-tenths of one per cent, for coin- 
age. This was two-tenths lower than Mr. Sherman pre- 
ferred, but without this he would not vote for the bill. He 
was unwilling to vote for free coinage while the people 
would have the same money to pay in other forms of taxa- 
tion. Mr. Sherman comes right to the point and says: 
" We do not carry people's letters for nothing, although 
that would be a convenience, and would increase the num- 
ber of letters to be carried. We do not coin silver for 
nothing; on the contrary, w T e get a profit of about two per 
cent, (now fifteen per cent.), and on the nickel coinage we 
get a much larger profit. We do not propose to do any 
thing for private citizens unless w T e are reimbursed for the 
expenses, and there is no justice, no propriety in taxing the 
farmers of the United States, or the merchants of the 
United States, or the people of the United States generally, 
for this expense of one hundred or one hundred and fifty 
thousand dollars for maintaining our mints, merely for the 
purpose of giving a fancied benefit to the diggers of gold 
in California." He thought the result of the abolition of 
this charge would be to force all the gold of California into 
the mint to be coined, without adding a particle to its value 
for exportation or use. In this, as in every speech and 
vote, Mr. Sherman is for doing justice to the individual, 



xi.] REVENUES AND EXPENSES. 173 

and saving money to the Treasury; all to help on toward 
resumption. 

INCOME TAX. 

In the Senate, January 25, 18.71, a bill was considered 
to repeal the income tax, which had been continued by the 
act of July 14, 1870. This aroused, again, all Mr. Sher- 
man's energy. Here his favorite project of early resump- 
tion, light taxes, and reduction of the debt was seriously 
threatened. This was a tax on all incomes over 82,000, of 
two and a half per cent. To show that he was no favorer 
of aristocracy, but thoroughly republican, note the follow- 
ing remark upon this bill : 

" The proposed repeal of the income tax necessarily in- 
volves the consideration of our whole financial system, and 
can not be hurried through upon the interested clamor of 
the comparatively few persons affected by it. Nothing is 
more pleasing than to repeal taxes, and it would be easy to 
show that the repeal of any tax now levied would give re- 
lief. The income tax is now levied only upon those whose 
good fortune it is to enjoy large property, or whose salaries 
or profits lift them far above the pressing wants that rest 
upon the great mass of our people. The possession of large 
property, and the ability to earn large incomes, give to 
those enjoying this income great influence over public opin- 
ion. They speak through the daily press, from high of- 
ficial stations, from great corporations, from cities where 
wealth accumulates, and with the advantage of social, per- 
sonal, and delegated influence. I know the power of this 
influence." 

Mr. Sherman was in favor of continuing this tax, be- 
cause it is a tax, and the only one, levied on property. It 
bears upon those best able to sustain it, and it is a method 



174 HON. JOHN SHERMAN. [chap. 

of reaching those whose income arises from United States 
bonds. He proposes to demonstrate these propositions: 

1. It is unwise to disturb the measures of the last 
session. 

2. Our revenues and expenses will not justify it. 

1 3. It will require a revision of our whole system of 
finance. 

4. u The repeal of this tax will affect injuriously the 
higher objects, namely, the funding of the public debt and 
the resumption of specie payments." 

Any thing that interfered with this last grand aim of 
the Chairman of the Finance Committee, awakened every 
nerve in his body, and all the energies of his soul. Not 
to sink the public debt, as the law required, "would de- 
preciate national credit, would interfere with the sale of 
bonds at a lower interest, and prevent or take away the 
ability to procure gold with which to resume. To take 
off this tax will make it necessary to levy it somewhere 
else, which there is not time to do now, without injustice 
somewhere." It was asserted that there was gold enough 
in the Treasury, more than was needed, to supply this de- 
ficiency. Mr. Sherman thought there was little enough for 
the purposes he had in view. A few years afterwards, a 
member of Congress would not believe he had so much till 
he went and examined. So Mr. Sherman was compelled 
to argue one way at one time, and another way at another 
time, according to facts and circumstances. 

March 15, 1872, a bill came from the House of Repre- 
sentatives to the Senate to repeal the duty on salt. This 
was largely mixed up with the political agitation that pre- 
ceded the Presidential election that year. Mr. Sherman 
regretted that a purely business matter should have be- 
come thus mixed, and proceeded to give some judicious 



xi.] REVENUES AND EXPENSES. 175 

rules and wise maxims for the imposition and non-imposi- 
tion of duties. Such were the increasing revenues of the 
nation, the improvement of credit, and the diminution of 
interest on the debt by refunding, that a reduction of taxes 
was admissible. The question whether bonds are payable 
in gold or not, is superseded by the fact that they are 
equal to gold. The legitimate wants of a growing nation,' 
like ours, are constantly increasing, but then the revenues 
are increasing, and that, too, without an increase of duty. 

" The effect of repealing and reducing taxes is often 
overestimated, lower duty often bringing increased rev- 
enue. From 1868 to 1871 the receipts from customs in- 
creased $42,000,000, being an annual increase of nearly 
$14,000,000, while custom duties were repealed which 
yielded $20,000,000 per annum." 

Here, in this speech, is the first distant rumbling of the 
financial storm that was to burst upon the nation the fol- 
lowing year. Mr. Sherman said: 

"If the rate of duties received during the eight months 
of the current fiscal year shall continue for the next four 
months, which months are equally favorable for the im- 
portation of goods, the actual receipts for the current year 
will not be less than two hundred and twenty odd million 
dollars ; and, making the ordinary allowance for an in- 
crease, the same duties will, during the next year, unless 
we have a financial revulsion, produce not less than 
$226,000,000, instead of $212,000,000." But that revul- 
sion came. 

Mr. Sherman states an interesting and important fact in 
the following words : 

" Our protective system has drawn to our country a vast 
array of industrious laborers. Even the high taxes we 
have been compelled to impose on domestic industry have 



176 HON. JOHN SHERMAN. [chap. 

not diminished our production, for they are accompanied 
by increased taxes on foreign products. We may theorize 
as we will, but the actual condition of the country is the 
best evidence that the industrial policy, steadily main- 
tained by us during the war and since the war, has 
been consistent with the most rapid progress, has en- 
abled us to meet unexampled difficulties, and yet has in- 
creased our imports, our exports, and our revenue. 

"The imports in 1869 were $414,000,000; in 1870, 
$452,000,000; and in 1871, §518,000,000. Our exports 
the same years were $413,000,000, $499,000,000, and 
$562,000,000. These figures show a steady increase in our 
foreign commerce, with a growing balance of trade in our 
favor. 

" If, then, the wisdom of our protective policy is to be 
tested by experience, I insist that it is proved to have been 
a wise policv, in the actual condition of our country." 

Here follows an emphatic element in Mr. Sherman's 
creed about protection : 

" Our taxes must be reduced to correspond with the re- 
duced wants of the public service. But every industry 
that has been called into existence by our policy, should 
be considered in any reduction of duties. • I hope, then,'* 
says Mr. Sherman, " in making the reduction of our rev- 
enue, we will all agree that it shall be so done as to give 
the greatest measure of relief, and do the least possible in- 
jury to any industry fostered by our laws." 

Mr. Sherman gives another thrust at the opponents of 
the income tax. "The public mind," he says, "is not yet 
prepared to apply the only key to a genuine revenue re- 
form. A few years of further experience will convince the 
body of our people that a system of national taxes, which 
rests the whole burden of taxation on consumption, and 



xj. REVENUES AND EXPENSES. 177 

not one cent on property or income, is intrinsically unjust. 
While the expenses of the National Government are largely 
caused by the protection of property, it is but right to re- 
quire property to contribute to their payment. It will not 
do to say that each person consumes in proportion to his 
means. This is not true." 

Mr. Sherman's tariff and revenue principles appear at 
this time to have been expressed about as follows: 

1. Dispense with internal revenue, except from whisky, 
tobacco, and beer. 

2. Duties on imports only for needed revenue. 

3. To be levied where they will do the most good and 
the least harm. 

4. To be levied on articles we can produce, not on others, 
unless it be to exclude them. 

These are substantially the same as before stated — the 
same that were accepted by the Whigs in 1848 — and they 
certainly do honor to Mr. Sherman, as to head and heart. 

"A revenue tariff is inconsistent with the extreme theo- 
ries of both the free-trade and protection schools." 

" The maxims of one nation in fixing the rates of duty 
are totally inapplicable to another." The Whig doctrine 
of 1848, precisely. 

" It is settled that our national revenue must, in the 
future, as in the past, be mainly collected by duties on 
imported goods, and as the war has enormously increased 
our wants, we may as well dismiss to future generations 
the extreme ideas of free trade and protection, which are 
alike inconsistent with a revenue tariff." 

The next snag which Mr. Sherman encountered in his 
efforts for resumption, was the claims for French spolia- 
tion, prior to 1800. which was speedily removed, in the 
way previously noticed, in December, 1872. 



178 HON. JOHN SHERMAN. [chap. xi. 

RE-ISSUE OF NOTES. 

On January 14, 1873, appeared in Congress, evidence of 
another and more alarming premonition of the terrible 
panic of September, 1873. This intimation appeared in 
the persistent pressure upon the Government for more 
greenbacks. Expansion and inflation had reached their 
limit, and the bubble must burst unless the Government 
should forfeit its covenant with the bond-holders, and issue 
more legal tenders. Evidently, a strong influence had been 
brought to bear upon the Senate, and at the above date, 
Mr. Sherman, from the Committee on Finance, made the 
following report. That committee, in obedience to the 
resolution of the Senate, made the inquiry as to the le- 
gality of issuing legal tenders in place of the forty-four 
million dollars of notes retired and cancelled under the 
law of April 12, 1866. The committee reported the fol- 
lowing resolution: 

"Resolved, That in the opinion of the Senate, the Secre- 
tary of the Treasury has not the power, under the existing 
law, to issue notes for any portion of the forty-four millions 
of the United States notes, retired and cancelled." 

So this snag appeared to be removed for the present. 
But the struggle is far from being ended yet. An effort 
was made to throw upon the Government the responsi- 
bility and the cost of re-coining abraded gold coins, and 
keeping them up to the standard. To this, Mr. Sherman 
objected as being an unprecedented burden on the treas- 
ury. He says: "Neither the Government of the United 
States, nor any other nation in the world undertakes to 
make coins good except for their intrinsic value." On the 
coinage charge for gold, he says: "It has not been, and 
ought not to be, repealed." 



CHAPTER XII. 

THE PANIC. 

On the 16th of January, 1873, an act was proposed by 
the Committee on Finance, and earnestly advocated by 
Mr. Snerman, supplemental to the acts of January, 1864, 
to secure an elastic currency, to appreciate the national 
obligations, and to reach specie payments. The commit- 
tee propose free banking, and qualified specie payments, 
after the first of January next. That would be in 1874. 
He first presented the importance of specie payments to 
! the business of the country. Then the obligations we are 
under to pay at the earliest practical period. Every note 
has on its face the agreement to pay. The Supreme Court 
j so decides. Not only so ; it is policy to pay. The honor 
I of the country demands it. The chief requisite is, that 
I: the public should have confidence in our ability to main- 
ii tain resumption, and the coin will rarely be required. 
| This confidence, he thought, could be produced by one of 
; three expedients: 

1st. A large reserve of coin ; 2d. The authority to sell 
| bonds for coin ; and, 3d. Alternative redemption in either 
j coin or bonds. 

He then mentions several schemes, which he deems prac- 
|i ticable, to bring it about: 1st. To receive legal tenders for 
I bonds; 2d. For duties; 3d. Exchange them for compound- 
ing 



180 HON. JOHN SHERMAN. [chap. 

interest notes; 4th. Fix a day for resumption; 5th. A 
graduated scale of resumption. 

On the 17th of January, 1874, just one year later, the 
same subject was before the Senate for consideration. But 
what a change had one year brought about! A financial 
tornado had swept through the land, from the lakes to the 
gulf, and from the Atlantic to the Pacific. Business of 
every kind became stagnant; demand for manufactures 
ceased; merchants failed; banks broke, and all commercial 
credit seemed to be at an end. The diminution of business 
made it necessary to reduce wages. That caused strikes 
among workmen, and these led finally to a wide-extended 
riot. It was soon quelled, however, and after a long de- 
pression, better times began to dawn. Six years and four 
months it may properly be said to have lasted, and ended, 
in fact, with the resumption of specie payments in 1879. 
Before that time, however, Mr. Sherman has the battle to 
fight over again. The first of January, 1874, was the time 
Mr. Sherman had fixed in his own mind for resumption, 
and but for the panic, it would probably have been readied 
then. But that revulsion deferred it five years longer. 
Business lagged; revenue — both internal revenue and im- 
port duties— fell off; the $44,000,000 retired legal tenders 
were re-issued, in part, in violation of law, which destroyed 
confidence in the Government more than it aided the peo- 
ple, and for years a pall of gloom hung over the future. 

Still our financier was game. Difficulties in his way 
were not new. He had learned to bear the yoke even in 
childhood, and here at this date rises in the Senate to 
speak on "the bill to provide free banking, to secure an 
elastic currency, to appreciate national obligations, and 
to reach specie payments, without commercial embarrass- 
ment." 



xn ] THE PANIC 181 

He begins with the announcement of the great axioms 
of political economy, and it is repeated here that it may be 
impressed upon the memories of all who read this sketch. 
In truth, the leading purpose of this book is, in as small a 
compass as possible, to impress upon the minds of our 
youth the lessons of wisdom which our financier is so com- 
petent to teach. This is one reason for putting down so 
much of it in his own words. 

" The most obvious of these axioms," he says, " and one 
which lies at the foundation of the argument I wish to make 
to-day, is that a specie standard is the best, and only true 
standard of all values, recognized as such by all civilized 
nations of our generation, and established as such by the 
experience of all commercial nations that have existed 
from the earliest periods of recorded time. 

"It is idle for us to try to discuss, with intelligence, the 
currencv question, until we are impressed with the truth, 
the universality, and the immutability of this axiom. 
Every man must have his trade, and needs some things 
he can not make, and must have something convenient to 
exchange for it. Paper, in various forms, may be used, 
but takes its value from being convertible into gold and 
silver, as being of intrinsic value, durable, divisible, easily 
transported, of universal use, and of the same qualities 
wherever found. 

"Formerly specie was the chief medium of exchange, 
but now, from the use of checks, drafts, and notes, it forms 
a small part of it; in this country about five per cent., in 
England two percent., but it always measures the value 
of these expedients for exchange. Credit money often 
becomes worthless when it is not backed by specie, or 
other property that will bring it; but where a Govern- 



182 HON. JOHN SHERMAN. [cuav. 

ment undertakes to supply paper money, it is bound to' 
make it good." 

The argument put forth in the Senate, January 16, 1874, 
is certainly the most powerful of any he ever made, up to 
that time. Powerful because it was an overwhelming ap- 
peal to the most authoritative element in man's constitu- 
tion — namely, to the conscience — and the solemn obliga- 
tions to observe the national compact to redeem the green- 
backs in gold: 

"Mr. President," he says, "thus far my remarks are 
founded upon the experience of ages, applicable to all 
countries, and to all commercial nations of our time. I 
present them now as axioms of universal recognition. And 
yet I have heard these axioms denounced in this Senate as 
'platitudes,' useless for this discussion in the Senate of the 
United States. The wisdom of ages, the experience of 
three thousand years, the writings of political economists, 
are whistled down the wind, — as if we in this Senate were 
wiser than all who have reasoned, and thought, and legis- 
lated upon financial problems, — -as if all this accumulated 
wisdom consisted of 'platitudes' unworthy to influence an 
American Senate in the consideration of the affairs of our 
day and generation." 

This paragraph marks out the foe, or rather the myriads 
of foes, that he had to deal with. But that man standing 
there on the floor of the Senate, backed by the wisdom of 
ages, by the eternal laws of right and wrong, the obliga- 
tion of solemn national compacts, and the momentous 
responsibility of nations to do what they promised to do, 
wher they have the power, is stronger than they all. The 
result has been proved that he was, just as the result 
showed that David was more than a match for Goliath. 

Mr. Sherman states his purpose to be "to prove that we 



xii.] THE PANIC. 183 

are bound by public faith, and by good policy, to bring our 
currency to the gold standard ; that such a result was pro- 
vided for by the financial policy when the currency was 
authorized ; that a departure from this policy was made 
after the war was over, and after the necessity for a de- 
preciated currency ceased; and that we- have only to 
restore the old feeling to bring us safely, surely, and easily 
to a specie standard." 

He appeals first to the pledge of the United States, in 
March, 1869, in these words: 

" And the United States also solemnly pledges its public 
faith to provide, at the earliest practicable period, for the 
redemption of the United States notes in coin." 

He refers to the circumstances under which this pledge 
was made. The whole subject, the condition of the cur- 
rency, the obligation of our bond, the nature of our prom- 
ises, had been discussed before the people, and the result 
was that those who believed that the bonds and notes 
should be paid in coin, prevailed, and General Grant was 
elected. On the eastern portico of the capitol, on the 4th 
of March, 1869, he said: "To protect the national honor, 
every dollar of Government indebtedness should be paid in 
gold, unless otherwise expressly stipulated in the contract." 

Congress then passed the act to strengthen the public 
credit, making the above pledge. "The day that pledge 
was made United States notes were worth 75j cents in 
New York— i. e. t the premium on gold was 32 per cent. 
In one year they were within 12 per cent, of par with gold. 
In one year our paper improved from 75 to 89 cents in 
value. Such was the effect of a promise. 

"But how have we redeemed this promise? It was 
made in obedience to the public voice, but how has it been 
kept? Congress has done," says Mr. Sherman, "no single 



18-4 HON. JOHN SHERMAN. [chap. 

act the tendency of which has been to advance." Con- 
gress made this promise five years ago. It was believed. 
Since that four years elapsed the value of greenbacks is the 
same as one year after, and "no act of yours has tended to 
advance the value of the greenback, but the contrary." 

Mr. Sherman's complaint was that we had paid $400,- 
000,000 of the public debt that was not due, and had not 
paid a single dollar of the debt that was due March, 1869; 
and it cost $40,000,000 to pay that in premiums, while the 
debts due had increased raster than the population. 

" I am not here," he says, "to find fault with individuals, 
but I do say that the Congress of the United States has 
not done what it ought to redeem its pledge. Why, sir, at 
this very moment we are living in violation of this pledge." 
On June 30, 1869, there were $356,000,000 of greenbacks 
— all the law allowed. On the first of this month $378,- 
489,339, over $22,000,000 unlawful currency, and now, the 
16th, has increased at the rate of $400,000 a day. The 
fractional currency had increased over twenty-one millions, 
national bank circulation had increased thirty-nine millions, 
in all an increase of legal tenders of nearly eighty-three 
millions, and still going on by the issue of the forty-four 
millions, and yet, he says, " there is a cry for more, more. 
Congress has failed to keep in view what it promised, viz., 
to redeem in coin. It has violated its pledge." 

Mr. Morton had urged that the increase of circulation 
had been attended with great improvement. Mr. Sher- 
man said, "If we can not pay in times of prosperity, and 
do as we promised, can we in times of adversity?" and 
argued that "at anytime steps could have been taken 
toward doing the thing promised, and now, under a panic, 
when debts are greatly diminished, is a favorable time for 
entering by decisive measures upon the policy of resump- 



xil] THE PANIC 185 

tion." Mr. Sherman employs irony sometimes, as follows: 
"I suppose, according to the Senator's ideas, we are to 
issue more paper money, make more good times, start the 
ball of inflation, with a view that some time, may be, in 
the dim future, we will undertake to perform our prom- 
ise. 

" But let us come to the specific question of the time for 
resumption. Shall the redemption of this pledge be post- 
poned until the public debt is paid? Why, sir, one-tenth 
of the money we have used to pay the public debt not due, 
would have brought us to the specie standard." Mr. Sher- 
man then thought it not necessary to reduce the circulation 
of greenbacks below three hundred millions, and gave it 
as the opinion of many business men, that if assured that 
the Government would be able to pay and continue to pay 
gold, very little would be called for, and says that $5'6,- 
000,000 that we have paid of the debt not due, would have 
brought the remaining greenbacks up to par in gold. 

He proceeds to show the futility of waiting till we have 
accumulated gold enough to redeem the notes ; of waiting 
for the balance of trade, and makes this eloquent appeal, 
which is a solemn and serious lesson to any nation or indi- 
vidual that owes a debt past due, or has made a promise 
and not fulfilled it: 

''Sir, there is no time unfit to fulfill a sacred obligation, 
and there has been no day since this obligation was declared 
by Congress, when we should not have directed our atten- 
tion toward redeeming it. You have buried your talent, 
and are an unfaithful steward. I ask the honorable Sen- 
ator from Indiana what single act of Congress since this 
pledge was made has even tended toward specie payments? 
Not one." Mr. Sherman urges the importance of fixing 
i the time, compliments the American people upon their 



186 HON. JOHN SHERMAN. [chap. 

fidelity to the bond-holder, and counsels them to be as 
faithful to the note-holder. 

After thus showing that covenant obligations required 
the Government to hasten resumption with all possible 
speed, and that it had shamefully and faithlessly violated 
its pledge, he proceeds to the argument, of less force with 
some, but greater with others, that it is policy to do so, and 
was a policy upon which they were adopted. The very 
foundation of the greenback was coin. It was by law 
equal to coin for all purposes, except to pay import duties 
and interest on bonds. These two were the only exceptions 
as to the use of the greenback. At first they were even 
convertible into bonds, but under the terrible pressure of 
war, this right was taken away. This Mr. Sherman re- 
gards as a mistake in which he shares the responsibility, 
but to this imputes the difficulty of returning to specie 
payments. 

He then proceeds to note the objections : 

"1. It will be burdensome to debtors — an objection well 
taken, but, then, debts are less than they were. 

"2. We will have to pay interest on a portion of the 
debt drawing no interest. True, but if we owe it, we 
ought to pay interest on it. 

"3. The United States notes will be withdrawn, and 
give place to national bank currency. That would be in- 
finitely better than the old State bank system. 

"4. It will contract the currency." Mr. Sherman did 
not think it would contract, but asks with great force, " Is 
it contraction to pay a note when it is due?" 

"When they" (the people) "find out that contraction 
means .good money, convertible money, greenbacks con- 
vertible into gold, they will sound hallelujahs in favor of 
that kind of money." 



xii.] THE PANIC. 187 

Mr. Sherman closed this speech thus : " Sir, I have been 
many years here and in the other house, through long and 
troublesome controversies, during peace and war, and I, 
for one, desire to see the work of our generation crowned 
by the greatest civic triumphs, the fulfillment of every 
promise, and to behold the nation free from all dishonor, 
its promises good, its credit untarnished, and its wealth and 
power increasing and expanding." 

On the 13th of May, 1874, a bill was brought in by the 
Finance Committee, on which Mr. Sherman spoke. The 
central idea of the bill was free banking. It may be of in- 
terest to the reader to learn in a few words what Mr. Sher- 
man's idea was at that time upon banking. Wherever the 
word free occurs, or can be introduced with a due regard 
to public welfare and the rights of others, he is in favor 
of it. He is not in favor of free bulldozing, nor free ballot- 
box stuffing, nor any kind of freedom that harms others ; 
but he is in favor of all just liberty. He and his family 
for ten generations back have been for liberty and against 
oppression. Ever since he went to Kansas on the commit- 
tee to investigate violence there, he has been in favor of 
free soil, free men, free schools, and a free press. But 
there is one principle that is dearer to him than liberty, 
and that is obedience to the law, keeping covenants, and 
observing treaties and contracts. He is, strictly speaking, 
in favor of free trade; i. e., he would lay no tax, except 
for needed revenue, unless it were to prohibit certain arti- 
cles from being imported, or to develop some new industry 
in the country. But when a tax must be levied, he would 
have it laid where it would do the least harm and the most 
good possible. Such was the reformed Whig doctrine in 
1848, and it is one that it would be well for all the world 
to practice. 



L88 HON. JOHN SHERMAN. [chap. 

Mr. Sherman is now in the Senate advocating free bank- 
ing. He says: "If the business of banking were confined 
simply to contracts of loan and exchange, there could be 
no objection to free banking. But the term banking, in 
common parlance, includes the power to issue circulating 
notes, to be used as money. This power is in no proper 
sense essential to the business of banking. If I had my 
way I would grant it to no State corporation and to no in- 
dividual, but confine it solely to the United States, and use 
it merely to facilitate domestic exchanges, and only to use 
an amount that could at any time be converted into coin 
at the will of the holder. Such, I believe, was the design 
of the framers of the Constitution, who, fresh from the dis- 
asters caused by paper money, desired to cut up, and sup- 
posed they had cut up, this evil by the roots. The pro- 
hibition upon the issue of bills of credit by the States, fairly 
construed, prohibits the issue of paper money by a State, 
or by any corporation authorized by a State. 

"If we were now in a condition to deal with this ques- 
tion solely upon principle, I would gladly join in prohibit- 
ing all po)er r^ney except such as might be issued by the 
United fctatef -v coin values, a redeemable in coin only. 
But, sir, we kir •" that we must deal with this question as 
practical men." 

Mr. Sherman is always practical. "As banking, and 
the issue of bank paper as money, has been so long prac- 
ticed, it has become a matter of habit, and, therefore, a 
necessity. Nov;, there are nearly two thousand banks, au- 
thorized to issue 8354.000,000 of paper money. The bill 
before the Senate proposed, on certain conditions, to repeal 
that restriction." 

Mr. Sherman first noticed the objection to free banking 
without coin redemption, but that soon passed away. 



xii.] THE PANIC 189 

The second objection noted is, that "the business of issu- 
ing paper money is a Government franchise, and the Gov- 
ernment should have the profit of it." True; but this is 
found to be " extremely inconvenient," and the Govern- 
ment can not always supply the want. It can only pay 
out money on its dues, but can not supply borrowers. 

It is said the Government loses money by not issuing its 
own notes instead of bank circulation; but the national 
banks are taxed enough to more than make up for all this. 
It would also impose on the Government the cost of re- 
deeming these notes, which would be immense. 

Were the United States to issue all the notes, there 
would bs no possibility of distributing banking capital. Ho 
that for the Government to issue its own notes and do its 
own banking would not be practicable. On the whole, 
Mr. Sherman is of the opinion that our mixed system of 
national banks, and Government issues, the former based 
upon bonds of the United States, redeemable in green- 
backs or coin, and the latter always in coin, is the best that 
can be framed. 

The two kinds of circulation are alike in some respects. 
They are both printed by the Government, and, therefore, 
one is no more likely to be counterfeited than the other. 
They are both equally well secured, and are both of uni- 
form value throughout the country. 

When the national bank system was adopted, it was un- 
derstood that as soon as the bonds should be on a par with 
gold, those banks themselves would redeem all these note-, 
as well as their own. This was a great argument in their 
favor; and now, Mr. Sherman says, if the national banks 
are not to redeem their issues, let them fall. 

"An advantage of free banking is, that it repeals the 
monopoly of banking.* It is a great advantage to our 



190 HON. JOHN SHERMAN. [chap. xii. 

system of currency, to abolish all monopolies, and to put 
all people upon the same footing." The remaining remarks 
on this bill go to show that the main purpose and aim of 
the free banking proposition was to stimulate and furnish 
motives for urging on specie payments. One provision of 
it was, that for every million dollars issued, half a million 
greenbacks should be retired. This would appreciate the 
United States notes, and tend to specie payments. 

It is perfectly surprising to witness the shrewd turns 
and ingenious plans of Senator Sherman to compel the 
United States to be honest and honorable enough to pay 
its debts, as it had promised. 



CHAPTER XIII. 

THE RESUMPTION ACT. 

In every great event that has a beginning, a progress 
and ending, there is somewhere a crisis. This is particu- 
larly the case in fevers and some other disorders, whether 
individual or national. One great disorder of the Ameri- 
can nation has been the institution of slavery, and its crisis 
was the great rebellion. As this disease affected the whole 
body politic in all its essential elements, the family, the 
school, the guild, the church, and the State, and every de- 
partment of each, there are, of course, various crises at 
various times. The military crisis of the rebellion was 
doubtless at Gettysburg; the .moral and civil crisis was 
when the colored man was made equal to the white man 
as to pay in the army ; and the true and healthful crisis 
in the finances of the country was when the resumption 
act was passed, fixing the time of specie payments. Mr. 
Sherman himself regarded this as the longest and severest 
conflict during his whole time of twenty-two years in Con- 
gress. Some six weeks were occupied in discovering plans 
and compromises by which enough votes could be secured 
to pass it; and it was finally passed, partly from a disposi- 
tion to let the Ohio Senator try and see if he could suc- 
ceed, and partly perhaps with the hope of seeing him fail ; 
partly because the favorers of contraction believed it meant 

(191) 



192 HON. JOHN SHERMAN. [chap. 

contraction, and partly because the favorers of expansion 
thought it meant expansion. Mr. Sherman persisted in 
ur-ino- that it did not mean contraction, but did mean to 
set a time when we would pay an honest debt, and make 
greenbacks worth as much as gold. 

To show the notions he had to combat, the latter part 
of the short speech on its passage is here inserted entire. 
After explaining the provisions of the bill, Mr. Sherman 
said : 

" Mr. President, these arc all the provisions contained in 
tliis bill. They are simple and easily understood, and 
every Senator can pass his judgment upon them readily. 

"Now I desire to approach a class of questions that is 
not embraced in this bill. Many such questions— and I 
could name fifty— are not included in this bill; and I may 
say tins: that if there should be a successful effort, by the 
Senate of the United States, to ingraft any of this multi- 
tude of doubtful or contested questions upon the face of 
this bill, it would inevitably tend to its defeat. I am free 
to say that if I were called upon to frame a bill to accom- 
plish the purpose declared in the title of this bill, I would 
have provided some means of gradual redemption between 
this and the time fixed for final specie payments. All of 
these means are open to objection. There have been three 
different plans proposed to prepare for specie payments, 
and only three. 

"One is what is called the contraction plan. The sim- 
plest and most direct way to specie payments is undoubt- 
edly the gradual withdrawal of United States notes, or the 
c >; fraction of the currency. Now, we know very well the 
feeling with which that idea is regarded, not only in this 
iate. but all through the country. It is believed to 
operate as a disturbing element in all the business relations 



xiii.] THE RESUMPTION ACT. 193 

of life; to add to the burden of the debtor by making 
scarce that article in which he is bound to pay his debts; 
and there has been an honest and sincere opposition to this 
theory of contraction. Therefore, although it may be the 
simplest and the best way to reach specie payments, it is 
entirely omitted from this bill. 

"The second plan — one that I have favored myself often, 
and would favor now if I had my own way, and had no 
opinion to consult but my own — is that of converting 
United States notes into a bond that would gradually ap- 
preciate our notes to par in gold. That has always been a 
favorite idea of mine. There is nothing of that kind in this 
bill, except those provisions which authorize the Secretary 
of the Treasury to issue bonds to retire the greenbacks, as 
bank notes are issued, and to issue bonds to provide for 
and to maintain resumption, I, therefore, have been com- 
pelled to surrender my ideas on this bill, in order to accom- 
plish a good object, without using the means that have been 
held objectionable by many Senators. 

"The third plan of resumption, which lias been favored 
very extensively in this country, is that of a graduated 
scale — what I call the English plan ; that is, that we pro- 
vide now for the redemption at a fixed rate, or scale of 
rates, of so much gold for a specific sum of United States 
notes. At present rates, we would give about $90 of gold 
for $100 of greenbacks, and then provide for a graduated 
scale by which we would approach specie payments con- 
stantly, and reach it at a fixed day. This may be called a 
gradual redemption. This, also, is objectionable to many 
persons, from the idea that it compels us to enter the 
money markets of the world to discount our own paper. 
It is an ideal objection, but a very strong objection — an 
objection that has force with a great many people. We 



!94 HON. JOHN SHERMAN. [chap. 

have undertaken to redeem these notes in coin, and it is at 
least a question of doubtful ethics whether we ought to en- 
ter into the markets of the world and buy our own notes 
at a discount. Although that plan was adopted in En- 
gland, and successfully carried into execution, yet there is 
a strong objection to it in this country, and, therefore, 
that mode is abandoned. Either of these plans I could 
readily support, but they have met, and will meet, with 
such opposition that we can not hope to carry them, or to 
ingraft them in this bill without defeating it. We have, 
then, fallen back on these gradual steps : first, to retire the 
fractional currency; second, to reduce "United States notes 
as bank notes are increased, and then to rest our plan of 
redemption upon the declaration made, on the faith of the 
United States, that, at the time fixed by the bill, we will 
resume the payment of the United States notes in coin at 
par. That is the whole of this bill. 

"Not only are all these plans of gradual redemption 
omitted from the bill, but there are also many troublesome 
questions omitted from the bill. If we undertake to de- 
fine precisely what shall be done four years hence on the 
resumption of specie payments, to say whether the legal- 
tender act shall then be repealed, or whether it shall be re- 
pealed before or not, we enter upon a difficult field, and 
will undoubtedly divide the Senate and divide the coun- 
try. Is ft not better to postpone, until the time comes to 
meet them, these questions which must then arise, rather 
than engage in an attempt to settle them now, four years 
in advance ? 

" We declare the time when specie payments shall be 
resumed, in order to give fair notice, so that market values 
for the future may be adjusted, and so that people will 
nrepare themselves for resumption. Our people may then 



xiit.] THE RESUMPTION ACT. 195 

base their transactions upon that solemn declaration made 
by Congress. 

" In regard to the other point, as to the reissue of the 
fractional currency, it will be seen that the first section is 
carefully worded to require an equal amount, in number 
and denomination, of the fractional currency to be re- 
deemed, and that this process is to continue until the whole 
amount of the fractional currency outstanding shall be re- 
deemed. But it is said that perhaps, after all this is done, 
we can not compel people who hold the fractional currency 
to present it for redemption. It must be remembered that 
we can not coin sufficient money to redeem all the forty- 
seven millions now outstanding in less than three years. 
The question is raised whether, at the end of the three 
years during which this process will go on, we shall pro- 
vide, by peremptory law, that the fractional currency shall 
not be reissued under any circumstances. We do not un- 
dertaker to do it, and I simply say that we should leave this 
question just where the section leaves it. We have pro- 
vided for the sure and certain redemption of this fractional 
currency in a course of time, which can not exceed three 
years, and, therefore, we do not propose to go further and 
decide whether it may be issued again or not. Until it is 
fully redeemed, the currency can not be reissued, and 
then it will be time enough to determine its issue or re- 
issue. 

" In regard to the absolute cancellation of the legal- 
tender notes that may be redeemed under the operations of 
the free banking clause, that matter is also provided for in 
the same way : 

" 'And whenever and so often as circulating notes shall 
be issued to any such banking association so increasing its 
capital or circulating notes, or so newly organized as afore- 



196 HON. JOHN SHERMAN. [chap. 

said, it shall be the duty of the Secretary of the Treasury 
to redeem the legal-tender United States notes, in excess 
only of $300,000,000, to the amount of eighty per cent, of 
the sum of national bank notes so issued to any such bank- 
ing association as aforesaid, and to continue such redemp- 
tion as such circulating notes are issued, until there shall 
be outstanding the sum of $300,000,000 of such legal- 
tender United States notes, and no more.' 

"How long will it take before this contingency shall 
arise? How long will it be before $100,000,000 of circu- 
lating notes shall be issued to national banks? How long 
will it be before this process comes to such an end that the 
question is at all material? No one can tell how fast these 
notes will be issued, or how rapidly they will be called for. 
In the present condition of affairs none probably will be is- 
sued, but, no doubt, with the revival of industry, with the 
local demand for banks here and there, with the probable 
new wants of currency, made necessary by the increase of 
business, banks will be organized — how rapidly no man can 
tell. At any rate, the question is not material until the 
whole amount of $82,000,000 is reduced, until the limit of 
$300,000,000 is reached. It is, therefore, scarcely neces- 
sary for us to ingraft in this bill provisions that will un- 
doubtedly lead to controversy and dispute, in order to 
meet a question that will be provided for in the future. 

"At all events, I say frankly that we do not propose to 
decide that question in this bill. I have no doubt that, 
when the time arrives, when the question becomes mate- 
rial, it will be met. Undoubtedly, until the reduction of 
the United States notes to $300,000,000 they can not be 
reissued. The process must go on pari passu, until the 
amount of legal-tender notes is reduced to $300,000,000. 
Before that time will probably arrive, in the course of hu- 



xiii.] THE RESUMPTION ACT. 197 

man affairs, at least one or two Congresses will have met 
and disappeared, and we may leave to the future these 
questions that tend to divide us and distract us, rather 
than undertake to thrust them into this bill, and thus di- 
vide us, and prevent us from doing something in the direc- 
tion at which we aim. 

" It is said that the bill is open to the construction that 
the Secretary of the Treasury may gather up the eighty per 
cent, as a reserve, and reissue the notes again, and that it 
is the intent of those who made the bill that it shall be 
open. I leave that question to be decided upon the law as 
it stands. The case that is put, of what I regarded as an 
illegal issue of notes, probably may never arise, and cer- 
tainly it can not arise for a considerable period of time. 
But, if there is any doubt upon that question, I leave ev- 
ery Senator to construe the law for himself; and, if there is 
a doubt about it, I say it is not wise, as practical men 
dealing with practical affairs, seeking to accomplish a re- 
sult, to introduce into this bill a controversy which will pre- 
vent that unity that is necessary to carry the good that is 
contained in this bill. 

"lam asked whether in my own mind the bill is open to 
that construction. 

" I do not care to give my opinion now. I have given my 
opinion once or twice before in regard to these questions. 
For instance, I gave my opinion when a bill was originally 
before the Senate four or five years ago, that the reserve 
which was provided in that bill could not be reissued, and 
}^et that opinion did not control the Secretary of the Treas- 
ury for the time being. I prefer to leave that question 
where the law leaves it, and to the judgment of that 
Congress that may come hereafter. 

" But the question is asked, whether we should pass a bill 



198 HON. JOHN SHERMAN. [chap. 

on a subject like this, so delicate and so important, the 
meaning of which is so obscure that the champion of the 
bill has to admit himself that its construction will be left 
to the* courts of the United States. 

"In supporting a bill of this kind, I do not meet all pos- 
sible questions that may arise in its construction, and no 
human mind could do it. I know this, and upon this rock 
I stand : that this bill has provisions in it which tend to 
accomplish the purpose which I have so diligently sought, 
and I will not seek to obstruct its passage or defeat it by 
thrusting into it doubtful questions of law or public policy 
which may tend to defeat it. I take this bill not as the 
bill that I should propose myself— a bill which itself sur- 
renders many of my convictions as to the means to be 
employed to accomplish the particular purpose designed — 
but I take it because I see that every provision in it tends 
to the object sought, and I will not weaken it by putting 
in questions of grammar or construction which may tend 
to weaken and destroy it. It seems to me the language 
is very strong, and the provisions ample and potent. 

" ' And to enable the Secretary of the Treasury to prepare 
and provide for the redemption in this act authorized or 
required, he is authorized to use any surplus revenues, from 
time to time, in the Treasury not otherwise appropriated, 
and to issue, sell, and dispose of, at not less than par in 
coin, either of the descriptions of bonds of the United 
States described in the act of Congress approved July 14, 
1870, entitled "An act to authorize the refunding of the 
national debt," with like qualities, privileges, and exemp- 
tions, to the extent necessary to carry this act into full 
effect, and to use the proceeds thereof for the purpose 
aforesaid.' 

"In other words, to prepare for and maintain redemption, 



xni.] THE RESUMPTION ACT. 199 

he may issue either a four, or a four and a half, or a five 
per cent, bond, the lowest that he can sell at par in coin. 
We place in his hands the surplus revenue of the Govern- 
ment. More than that, we here by law declare our pur- 
pose, the purpose of a Government and a people that have 
never violated their obligations when distinctly made, that 
at this time and date we will do these things, which' 
amount to a resumption of specie payments. 

"Now, sir, the great weakness of our currency is, that 
we have undertaken to pay our notes in coin, and do not 
fulfill our promise. No man denies that obligation. It is 
so written upon the statute books, now six years old. But 
from the fact that we have not said at what time we will 
do it, the question is still open, to rest upon the construe 
tion which each Senator and member may give to the 
words, 'as early as practicable' — an indefinite phrase at 
least, and one that applies to all future ages. The object 
of this bill, and the objective point of this bill, is to fix a 
time within which the honor of the United States is 
pledged to redeem these notes in coin; and that pledge, 
if made by Congress, and I trust it may be made by the 
whole of Congress, of all parties, and made by the whole 
people — that pledge, if made, will be redeemed. It is true 
a subsequent Congress may repeal it. Any thing we can 
do may be repealed by a subsequent Congress. All we can 
do is in our time to pledge the faith of the United States 
to do this in the future ; and if the people in their power 
and might, through agents hereafter elected, violate this 
promise, there is no power in our Government to prevent 
it. We only know that they probably will not do it ; that 
a pledge thus specific, made as to a definite day and time, 
with ample powers given to an executive officer to execute 
it, will be maintained. 



200 HON. JOHN SHERMAN. [chap. 

" I desire to say one word more : that this pledge is made 
knowing the full extent of the obligation imposed by this 
law, and I believe that every Senator who votes for this 
bill is personally pledged — all his political influence is 
pledged — to maintain that declaration, just as our fathers 
felt themselves bound by their lives, their fortune, and 
their sacred honor to maintain the pledges they made in 
the Declaration of American Independence." 

The following is the resumption act as passed by both 
Houses, and is inserted here as a special memento of the 
chef-d'oeuvre of the subject of this sketch : 

"An Act to provide for the resumption of specie pay- 
ments : 

" Be it enacted by the Senate and Hoitse of Representatives 
of the United States of America in Congress- assembled. That 
the Secretary of the Treasury is hereby authorized and re- 
quired, as rapidly as practicable, to cause to be coined, at 
the mints of the United States, silver coins of the denom- 
inations of ten, twenty-live, and fifty cents, of standard 
value, and to issue them in redemption of an equal num- 
ber and amount of fractional currency of similar denom- 
inations ; or, at his discretion, he may issue such silver 
coins through the mints, the subtreasuries, public depos- 
itories, and post-offices of the United States; and, upon 
such issue, he is hereby authorized and required to re- 
deem an equal amount of such fractional currency until 
the whole amount of such fractional currency outstanding 
shall be redeemed. 

" Sec. 2. That so much of section three thousand five 
hundred and twenty-four of the Revised Statutes of the 
Unite.d States as provides for a charge of one-fifth of one 
per centum for converting standard gold bullion into coin 



xiii.] THE RESUMPTION ACT. 201 

is hereby repealed ; and hereafter no charge shall be made 
for that service. 

"Sec. 3. That section five thousand one hundred and 
seventy-seven of the Revised Statutes, limiting the aggre- 
gate amount of circulating notes of national banking asso- 
ciations, be and is hereby repealed; and each existing 
banking association may increase its circulating notes in 
accordance with existing law, without respect to said aggre- 
gate limit; and new banking associations may be organ- 
ized in accordance with existing law, without respect to 
said aggregate limit: and the provisions of law for the 
withdrawal and redistribution of national bank currency 
among the several States and territories are hereby re- 
pealed. And whenever and so often as circulating notes 
shall be issued to any such banking association so increas- 
ing its capital or circulating notes, or so newly organized 
as aforesaid, it shall be the duty of the Secretary of the 
Treasury to redeem the legal-tender United States notes in 
excess only of three hundred millions of dollars, to the 
amount of eighty per centum of the sum of national bank 
notes so issued, to any such banking association as afore- 
said, and to continue such redemption as such circulating 
notes are issued until there shall be outstanding the sum 
of three hundred million dollars of such legal-tender 
United States notes, and no more. And on and after the 
first day of January, Anno Domini eighteen hundred and 
seventy-nine, the Secretary of the Treasury shall redeem, 
in coin, the United States legal-tender notes then outstand- 
ing, on their presentation for redemption at the office of 
the Assistant Treasurer of the United States in the city 
of New York, in sums of not less than fifty dollars. And 
to enable the Secretary of the Treasury to prepare and 
provide for the redemption in this act authorized or re- 



202 HON. JOHN SHERMAN. [chap. xiii. 

quired, he is authorized to use any surplus revenues, from 
time to time, in the Treasury, not otherwise appropriated, 
and to issue, sell, and dispose of, at not less than par, in 
coin, either of the descriptions of bonds of the United 
States described in the act of Congress approved July four- 
teenth, eighteen hundred and seventy, entitled "An act 
to authorize the refunding of the national debt," with like 
qualities, privileges, and exemptions, to the extent neces- 
sary to carry this act into full effect, and to use the pro- 
ceeds thereof for the purposes aforesaid. And all provis- 
ions of law inconsistent with the provisions of this act are 
hereby repealed. 

"Approved January 14, 1875." 



CHAPTER XIV. 

COINAGE. 

The people of this country are under no slight obliga- 
tions to Mr. Sherman for the general information he has 
given upon this important subject. The chief part of this 
is contained in two speeches — one made April 11, 1876, on 
"Fractional Currency and Silver Coinage," and the other 
June 8th, the same year, upon "Legal Tender of Silver 
Coin." Of course, the limits prescribed to the present 
volume forbid introducing ail the information therein con- 
tained, yet it seemed to the writer important to introduce 
something of it, to give an idea of the real service Mr. 
Sherman has done his country, and also to disseminate the 
information more widely than is done in the larger volume 
of speeches. The publishing of that book should not be 
accounted as among the least valuable of his labors. It 
will be looked back to as a brilliant light to guide future 
statesmen in the management of national affairs in this and 
other countries. The book called Speeches and Reports of 
John Sherman may and ought to be regarded as a text- 
book on finance, and this volume may be considered in part 
as a humble attempt at an abridgment for beginners. 

Mr. Sherman begins by noticing the dispute as to whether 
a single or double standard is the better, but dismisses the 
theory of it by saying he could refer Senators to about a 
hundred volumes on tne subject, showing that he had 

(203) 



204 HON. JOHN SHERMAN. [chap. 

studied the matter thoroughly. He was also a member of ; 
the Paris monetary conference of 1867, so that the reader 
has here the views of a man who knows whereof he 
speaks. 

In 1792, the relative value of gold to silver, in this 
country, was established as being fifteen to one. There 
was no discussion about it, except whether the dollar should 
have on it the head of liberty or of the President. This 
enactment drove gold out of the country, because it was 
worth more than fifteen to one. It demonetized gold. In 
1834, Congress reduced the weight of gold, making one 
ounce of gold worth sixteen of silver. This was as much 
too low as the other was too high. Now, silver was so 
valuable that it left the country, and we had nothing but 
gold. In 1853, an attempt was made to correct this evil, 
for small change became scarce. It was done, so far as 
small change was concerned, by making the half dollar four- 
teen and a quarter grains lighter than before, and other 
subsidiary coin in proportion, - and making no change in the 
dollar. This brought the small change in, but excluded 
the dollar still, so that we had only gold dollars. Between 
1853 and 1861, $48,000,000 of small silver was issued. In 
1873, the value of gold was slightly increased by allowing 
free coinage, and of silver by adding nearly a grain to the 
half dollar, and as the silver dollar was worth more than 
the gold dollar, it had left the country, and, in revising the 
statutes, was dropped. By the same bill the trade dollar 
was authorized to be coined for any who would pay the 
cost of coining, and the mistake about it was that it was 
made a legal tender to the amount of five dollars; thus 
putting it in the power of private individuals to increase 
indefinitely the legal-tender circulation. Mr. Sherman 
urged the repeal of the legal-tender character of the trade 



XIV. j 



COINAGE. 205 



dollar, rather than disappoint merchants by suppressing it. 
This is the history of American silver coinage. 

In England, the coinage of gold is free, and also silver, 
except that the Government retains four shillings in sixty- 
six of bullion, but makes the sixty-two shillings of bullion 
into sixty-six of coin, or tokens, as they call them. Their 
alloy of copper is seventy-five parts in a thousand, ours a 
hundred. The value of an English shilling in our money 
is twenty-one cents and four mills. . Though their silver is 
worth six or seven per cent, less than gold, yet with 32,- 
000,000 people they so limit it as to keep $60,000,000 of it 
in circulation as legal tender to the amount of nearly ten 
dollars. 

The twenty-five cent piece of Canada is worth a little less 
than ours, so that our coin will doubtless fill the channels 
of trade there. The money of France, Belgium, Switzer- 
land, and Italy is based mainly on the French standard of 
1792, and regulated by the convention of 1865, the most 
important monetary convention now in force. The weight 
of a five-franc piece is precisely the weight and fineness of 
our two half dollars or four quarters. The limit of issue is 
fixed at six francs— i. e., $1.20— per inhabitant, which 
gives to the four countries about $82,000;000 subsidiary 
coin. Each nation has its standard, besides, of fifteen and a 
half to one. The same law applied to us would make a 
circulation of about $50,000,000, but it is thought that, 
from the more scattered population of our country, we can 
maintain a circulation of subsidiary coin of seventy or 
eighty million dollars. 

The legal tender of this convention is ten dollars or 
under, among private individuals, twice that between States. 
This is the conventional law for 72,000,000 people. In 
the convention of 1867, which Mr. Sherman attended, this 



206 HON. JOHN SHERMAN. [chap. 

would probably have become the basis of the commerce of 
the world, had Germany consented, and the English been 
less proud of their pound sterling. 

"There is a great deal of misapprehension in regard to 
the recent action of Germany respecting silver. The com- 
mon impression is that Germany has changed her standard 
from silver to gold, and demonetized silver, Kot so. She 
has adopted a double standard of gold and silver. Still a 
larger silver coinage is authorized in Germany than is 
found elsewhere in Europe. In France, it is $1.20 per 
inhabitant; in England, $2.00; with us, SI. 25, so far; and 
in Germany it is $2.38, making $100,000,000 of silver 
coin. The amount of silver outstanding in Germany was 
about $400,000,000. There is still outstanding of legal 
tender, old coinage, $180,000,000, and $50,000,000 of the 
new silver, besides $300,000,000 in gold, which displaces 
$170,000,000 of silver. This has brought our trade dollar 
from 1.03 to .91." 

This move caused a struggle for gold between the great 
nations, which raised the price of that metal, so that the 
late change is not so much a fall in silver as a rise in gold. 
It was readily seen that if $320,000,000 of silver coin were 
demonetized, and $350,000,000 of gold coin made the sole 
standard, it would add greatly to the value of gold, and 
now (1876), in the three countries, England, France, and 
Germany, are $600,000,000 in gold, or nearly one^fifth of 
the supply of the world. This process will certainly be 
arrested. Mr. Sherman said: 

"The utter ruin that would come to mankind, especially 
to the poorer nations, by the entire demonetization of silver, 
can not be estimated by us. Take one-half of the solid 
money of the world out of existence, take the sole standard 
of more than two-thirds of the human race, reduce it to a 



xiv.] COINAGE. 207 

base metal, and the effect upon the commerce of the world 
would be incalculable.' It can not be done, it will not be 
done. There is no danger of it. These two metals have 
traveled side by side from the beginning of time. The 
records of human history do not go back to a time where 
they did not move together. They have varied in value, 
sometimes one and sometimes the other being higher ; but 
they have gone on, gold the money of the rich, silver the 
money of the poor, the one to measure acquired wealth, 
the other to measure the daily necessities of life, and, sir, 
no act of parliament, although it may disturb for a mo- 
ment the relation of these two metals to each other, noth- 
ing but the act of God, can destroy the use of both of them 
by mankind. 

" In ancient times the relative value was about one ounce 
of gold to thirteen and one-half of silver ; toward the end 
of the Roman Empire, one to fourteen and one-half; in the 
middle ages down to the fifteenth century, one to sixteen. 
After the discovery of America, gold fell rapidly down to 
one of gold to eleven of silver. After the beginning of the 
seventeenth century, it began to rise gradually, and at the 
end of the eighteenth, was one to fifteen and a half, and 
remained at about the same till since 1873, when the fall 
of silver has been rather rapid." 

From this view Mr. Sherman drew the following con- 
clusion, which all will do well to remember, whether acting 
in a public capacity or voting in private : 

1. The precise relative value of gold and silver can not 
be fixed. 

2. When a coin is worth more than the legal standard, 
it will leave the country. 

3. To prevent depreciation silver is issued as token coin- 



208 HON. JOHN SHERMAN [chap. 

age of less value than gold, but kept at par by a limitation 
in quantity. 

4. Demonetization of silver raises the price of gold. 

5. Both coins are indispensable. 

6. The causes of the decline are temporary. 

7. The general monetizing of silver now would be to 
invite to our country, in exchange for bonds, the silver of 
Europe, and leave us with a depreciated currency. 

8. The decline of silver now enables us to take up our 
fractional currency without loss, without using our gold or 
contracting the currency. 

Mr. Sherman urged that subsidiary coin should be legal 
tender for five dollars, and that the old dollar, the first one, 
not 412.5 grains but 412.8 grains, be restored and made 
legal tender for ten dollars, but was willing to enlarge to 
twenty, as a compromise. 

It was objected that this was an entering wedge to a 
double standard, Mr. Sherman said we have always had a 
double standard. Until three years ago the dollar was a 
full legal tender, and every dollar we owe could have been 
paid in dollars of that standard. 

One parting word Mr. Sherman has: "And, sir, any 
intimation by Congress, any effort by Congress to impair 
the public debt or prevent its full payment in gold coin, 
would, in my judgment, do more harm than all the silver 
that can be issued under this or any other law can do good." 

On the 8th of June, two months later, Mr. Sherman ad- 
dressed the Senate on the bill to amend the laws relating to 
legal tender of silver coin. There were two main questions : 

1. Shall silver coin be exchanged for United States 
notes, as well as for fractional currency? Certainly, says 
Mr. Sherman, it being at the option of holders whether or 
not to part with them for silver. 



xiv.] COINAQE. 209 

2. Is it wise to receive the old silver dollar with a view 
to exchange it" for United States notes? The Committee 
proposed the silver dollar, not as a legal tender for gold 
contracts, but only as a tender for currency contracts not 
exceeding twenty dollars in any one payment. "I would 
prefer," says Mr. Sherman, "to leave the silver dollar to 
stand on its intrinsic value as the smaller coin, but there is 
no injustice in enlarging the limit to twenty dollars." 

Mr. Sherman acknowledges an error he made in saying 
the dollar had not been issued since 1853. Official reports 
show that large quantities were issued from 1870 to 1873, 
when it was demonetized. Mr. Sherman says the only 
reason that silver coinage was dropped from our system 
was that the silver dollar was more valuable than the gold 
dollar, and quotes a report made by Comptroller Knox, 
April 25, 1870, stating that the average premium on silver 
dollars above gold for the last six years had been three per 
cent. 

Mr. Sherman's view is that gold should be the standard 
of value, bnt that silver should be coined in limited quan- 
tities of slightly less value than gold, but kept at par by 
being limited in quality, and made a legal tender for small 
amounts. But if a limitable system be adopted, the just 
relative value should be fixed at that time — say one ounce 
of gold to equal in value seventeen and a half of silver. 

18 



CHAPTER XV. 

EFFORTS AT REPEAL ANSWERED. 

After the passage of the Resumption Act, in 1875, it 
will be remembered that most strenuous efforts were made 
to secure its repeal. The opposition, in truth, never 
ceased till resumption took place, nor then either. It was 
so inwrought into the political opinions of men that, to this 
day some will, with great reluctance, admit its success; 
when, as Secretary Schurz said at Cincinnati, "You might 
as well repeal this morning's sunrise as to repeal resump- 
tion." 

In December, 1877, nearly three years after the passage 
of the act, the editor of the North American Review sought 
the opinions of leading statesmen upon the subject, and 
embodied them in what has since been called a "sym- 
posium." Their names were Hugh McCulloch, Wra. D. 
Kelley, David A. Wells, Thomas Ewing, and Joseph S. 
Ropes. After these had written, their papers were sub- 
mitted to Senator Sherman, and he was. requested to pre- 
sent his views, to be published along with theirs. What 
their views were will be sufficiently apparent from Mr. 
Sherman's answer, which is as follows, from the North 
American Review, for November and December, 1877: 

The editor of the North American Revieiv lays before me sev- 
eral papers, prepared by gentlemen of distinction, upon the 
general subject of resumption, presenting opposite views, and 
(210) 



chap, xv.] EFFORTS AT REPEAL ANSWERED, 211 

asks me briefly to comment upon them. This I could hardly do 
in a short statement, nor is it necessary, perhaps, as the mistakes 
and exaggerations of extreme opinions are sufficiently illustrated 
and answered in the opposite views of the writers of these arti- 
cles. Perhaps the editor will be satisfied, in his commendable 
search after truth through discussion, with a brief reply to some 
of the general positions taken by the two opposing sides on this 
question. 

Judge Kelley and General Ewing may fairly be said to represent 
the inflation or extreme paper-money view. The substance of 
their papers is an eloquent but rather overdrawn picture of the 
financial distress through which we have recently passed; but the 
great error into which they have fallen, and into which it is 
strange that men so acute of intellect as they are should fall, is 
to attribute this financial distress to the resumption act, instead 
of to its real and only cause, the unparalleled inflation of paper 
money and credits during and since the war. The losses by the 
Chicago fire of 1872, the still greater trouble that culminated in 
the panic of 1873, — all the losses, failures, distress, and embarrass- 
ment, the reckless and foolish accumulation of municipal debts, 
credits, devices, and frauds, the natural effect of inflated and de- 
preciated paper money — all these they absurdly charge to an act 
of Congress that was not passed until January, 1875. Only one 
provision of this act — that to substitute silver money for frac- 
tional currency — had been partially put in force previous to 
March last. No other important step under the law had then 
been taken, and since then in its practical results it has been one 
of the chief causes of our present improved and improving finan- 
cial condition. It is strange that in the writings and speeches of 
these gentlemen they overlooked the fact that the panic of 1873, 
and all the wild and visionary schemes that preceded it, together 
with all the train of events that led to every failure that has oc- 
curred since, had been fully consummated before the resumption 
act was passed, and that the resumption act was the remedy pro- 
vided by Congress to check and cure these evils, and is now in 
full tide of successful execution. Their eloquence is wasted, ex- 
cept to show that depreciated and inflated paper money has pro- 
duced in our country, as it has produced in other countries, the 






212 HON. JOHN SHERMAN. [chap. 

Rarae result of stagnation, distress, bankruptcy, and ruin; that 
war, which makes necessary a depreciated and inflated paper 
money, is the primal cause of these troubles; that it was so after 
the war of the .Revolution, after the great wars in Europe, and 
would have been even worse in our own country but for its won- 
derful vitality and resources. If at the close of the war we had 
promptly taken steps toward specie payments, much of the evil 
would have been avoided, and the municipal and private debts 
which now burden our people would never have been contracted. 
The postponement of resumption was a great error, but was partly 
excused by the destruction of values caused by the war and by 
the exaggerated fears in the popular mind of contracting the 
currency to a peace standard. 

My only reply to these gentlemen would be that the distresses 
they complain of were the direct, certain, and unavoidable result 
of the very policy of inflation which they favor, and that it 
would be just as idle now to keep up this inflation with the hope 
of prosperity as it would be to advise a drunkard to keep on 
drinking in the hope of reform. 

To attribute failures and distress to the resumption act instead 
of to depreciated paper money is but a repetition of the complaint 
of the wolf against the lamb for roiling the water. It is like 
swearing at the doctor for causing pains in administering reme- 
dies for a raging fever. The homoeopathic doses administered 
under the fesunipiion act prior to March, 1877, had one virtue, 
if no other; they could do no possible harm, if they did not do 
any good. Since the 1st of March the steps taken for resumption 
have been so rapid and marked as to produce important direct 
results, but they have been constantly accompanied with advanc- 
ing prosperity, increasing trade, and have given us the first broad 
glimmering of returning light after a period of distress and 
trouble. 

The resumption act was intended by Congress as a remedy for 
the evils under which we were then suffering. It was passed sev- 
enteen months after the panic of 1873, and when we were in the 
midst of all the evils of inflation. The experiment of further 
inflation to cure inflation w r as fairly, though illegally tried, by 
throwing into the maelstrom £26,000,000 of United States notes 



xv.] EFFORTS AT REPEAL ANSWERED. 213 

that had been retired and cancelled. Every device for relief, as 
well for resumption as for expansion, had been fruitlessly dis- 
cussed in Congress without agreement. The subject in every 
phase had been considered by the people during all that time. In 
the fall of 1874 public sentiment had crystallized in favor of some 
step toward the resumption of the specie standard. This led to 
the passage of the resumption act. This act was simply a decla- 
ration that we would restore the value of our paper dollar to the 
specie standard by the 1st of January, 1879. The mode and 
means by which this was to be done were not pointed out as they 
ought to have been, but the details were left to the Secretary of 
the Treasury, and the powers conferred were ample and definite. 
This remedy was the natural one, the one that all nations have 
prescribed, the one that our fathers followed after the Revolution, 
which England and France have more than once followed, and 
which every nation must follow that is driven for the time from 
the specie standard. No human device has ever sufficed to relieve a 
nation that adopts irredeemable paper money from the necessity 
of returning to the only natural standards of value — gold and 
silver. This act was passed as ihe result of wide differences of 
opinion that could not be reconciled, and did not contemplate sud- 
den changes or movements. 

Four years were allowed to prepare and to provide for resump- 
tion. Thus far, prior to March last, $28,743,318 silver was sub- 
stituted for $17,074,317 fractional currency retired ; no gold was 
accumulated, and greenbacks were retired only to the extent of 
eighty per cent., as national bank notes were issued. This plan 
of resumption is confessedly not a perfect plan, and almost ev^ry 
one has desired to make amendments to it, but it is the only one 
that Congress would grant, and it is now demonstrated that under 
the provisions of that act the specie standard can be reached by the 
1st of January, 1879. I repeat what I have said elsewhere, that 
resumption can be, ought to be, and will be secured if this law is 
not repealed by Congress. 

And here I should refer to the papers submitted by Mr. McCul- 
loch and Mr. Ropes, all very well stated, all very well written, and 
with many of their ideas I heartily agree. But what is the use of 
talking about other plans of resumption? The idea suggested by 



214 HON. JOHN SHERMAN. [chap, 

these gentlemen was advocated in Congress for years. A simple 
funding act was proposed by the Committee on Finance in 186G, 
and was pressed year in and year out. In the original draft of the 
funding act, now a law, United States notes were convertible at the 
will of the holder into four per cent, bonds precisely such as we are 
now selling at par in coin. With this feature the bill passed the 
Senate, but the House refused to pass it. No proposition has been 
more frequently urged and acted upon adversely by Congress than 
that now advocated by Messrs. McCulloch and Ropes. What is 
the use of wasting ammunition on this ? What is the use of de- 
laying resumption until Congress will pass such an act? If Con- 
gress would pass such an act it would greatly aid and expedite re- 
sumption, and I cordially join with these gentlemen in the hope 
that such a bill will pass, and advise them, if they think they can 
promote it, to get into Congress as soon as possible to help. I have 
tried the experiment, with much labor and no success. What, 
then, is the use of distracting attention by new plans of resump- 
tion ? I receive, on an average, about one a week, some of which 
are wild, and some of which contain very good ideas. I could fur- 
nish from the files of the Finance Committee as many plans of re- 
sumption as there are cities in the United States. But it is mani- 
fest, to practical men, that no legislation can be obtained from 
Congress except some simple measure that will aid the execution 
of the present law, the danger being rather that the opponents of 
resumption will be strong enough to arrest the movements already 
made in that direction. 

Now, dismissing for the moment the extremes of opinion on re- 
sumption, the practical question is, What ought to be done now? 
Shall we abandon the progress already made towards a specie 
standard, and commence again the wild round of experiments on 
interconvertible bonds and paper money, without promise or hope 
of redemption? Shall we repeat again any or all of the financial 
fallacies which have marked the history of mankind, or shall we 
go steadily forward until we can base all our transactions upon that 
money which, by the experience of mankind, is proved to be the 
best possible standard of the value of all labor and produc- 
tions ? 

Mr. McCulloch says, truly, that if any party should undertake, 






xv. J EFFORTS AT REPEAL ANSWERED. 215 

in the face of the present movement towards resumption, now as- 
sured of success, to reverse that policy, it would do not only a 
wrong thing, but a very foolish thing. But is it not equally fool- 
ish for the friends of resumption to now dispute longer as to the 
best plan of resumption ? If all the people were agreed as to the 
policy of resumption, we should have strength enough to divide as 
to the means ; but, when we have barely a majority in favor of re- 
sumption at all, is it not better to cling to the plan now in proc- 
ess of execution? 

Many new questions are thrust into this controversy that ought 
not to embarrass resumption. Thus, General Ewing insists that 
resumption means the entire extinction of the greenback circula- 
tion. No doubt many persons are in favor of withdrawing these 
notes or repealing their legal-tender quality, but this is a question 
properly for the future, my own conviction being that, under exist- 
ing law, after they are reduced to $300,000,000 and have been 
redeemed, they may be reissued, and that the national bank cur- 
rency should be used simply to meet the ebb and flow indispensa- 
ble to every good currency. But this may be determined by Con- 
gress either way without affecting the virtue of the law. 

So the silver question, entirely within the power of Congress, 
may be made a most essential aid to resumption if confined either 
in the amount or mode of issue or in its legal-tender quality. If 
issued without limit upon the demand of a depositor of silver bull- 
ion, it is the substitution of a single silver standard instead of the 
gold standard. Whatever decision Congress may arrive at on this 
question, the Resumption Law must stand, to prevent our paper 
money from falling below the specie standard fixed by Congress. 
At present paper money is worth more than silver, because the 
market value of silver bullion is greatly depreciated. The expec- 
tation of the redemption of our paper money in gold, with our 
demonstrated ability to do so, has brought it nearly to the standard 
of gold. If silver alone should be adopted as the standard, the 
paper will fall even below that standard, unless resumption in sil- 
ver is provided for by law. 

The existence and power of the national banks depend entirely 
upon the will of Congress. Banking is now free, and this provision 
of law is a happy and wise expedient to prevent any sudden con- 



21G HON. JOHN .SHERMAN. [chap. 

traction of the currency, or, as now, to meet an unusual demand 
for currency. The Comptroller of Currency is prepared to issue 
promptly any amount of bank notes that will be required. The 
provision for the redemption and retirement of this currency is 
now in successful operation, and may be continued in specie-pay- 
ing times as now, but Congress has power to further limit or re- 
strain this issue, or to make any further provisions necessary to 
secure the prompt redemption of bank notes. 

These are all questions apart from the Resumption Act which 
is intended to secure the free conversion of United States notes 
into coin, such as is now provided, or may hereafter be provided, 
by Congress. 

There is only one other point as to the Resumption Act that it 
is necessary to mention, and that is the ability under it to secure 
resumption. This, I submit, has been demonstrated. The accu- 
mulation of coin, and the gradual retirement of United States 
notes, will unquestionably, if continued, produce specie payments 
before the time fixed by law. The rapid changes that have 
already been made in the value of United States notes, by the pol- 
icy adopted for the last six months, have been marked and 
decisive, and this has been accompanied and followed by a great 
improvement in all branches of industry, and has been favored, 
no doubt, by Providence in the gift of a large crop, for which 
there is a ready demand. 

The brightest lining of the dark cloud depicted by some of the 
writers of these papers is to be seen in the steady pursuit of this 
policy of resumption. If the friends of resumption will only be 
content with the plan of resumption that is now upon the statute- 
book, securing only such additional legislation in aid of resump- 
tion as Congress, in its wisdom, may see proper to grant, there 
need be no fear of the result. 

We need not raise the question presented by Mr. Wells, nor do 
I see that it would be effective ; for, if a law is passed repealing 
or modifying the Resumption Act, there is no authority in 
our Government that can restrain its execution. Nor is it to be 
presumed that Congress will do any thing to impair the public 
faith pledged to any portion of its creditors. Popular commo- 
tion always stops short of this. There is no tradition of the 



xv.] EFFORTS AT REPEAL ANSWERED. 217 

National Government more sacred than that which holds it to a 
rigid, faithful observance of the public faith. It is by this alone 
we are enabled to sell our bonds bearing four per cent, interest 
at par in coin. The confidence thus inspired and thus ev- 
idenced is the best property of the nation — worth more, in times 
of adversity, than all the gold and silver that can be accu- 
mulated. 

L 



CHAPTER XVI. 

ALLEGED DISCREPANCIES IN THE TREASURER'S REPORTS. 

As there has been something said, for several years past, 
respecting a discrepancy in the Treasurer's report, it will 
not be amiss to make a special investigation, that the 
merits of the case may be clearly understood by the read- 
ers of this sketch. 

On the 12th of January, 1876, Mr. Davis, of West Vir- 
ginia, offered the following : " Whereas, There appear to be 
material alterations and discrepancies in the official finance 
reports of the Treasury Department, as to the annual ex- 
penditures, receipts of the Government, and public debt, 
and particularly in the reports of 1869 and 1872, inclusive, 
which discrepancies and changes and alterations involve 
large amounts, and no satisfactory explanation appears on 
the face of the same ; therefore, be it resolved," etc. 

The above preamble was laid on the table, and the mat- 
ter referred to the Finance Committee. 

Mr. Davis asserted that he could show, from official 
figures, that the "finance reports of 1865-1869, which 
agree with each other, show that the net ordinary expendi- 
tures of the Government were nearly one and a half mill- 
ions less than the report of 1870 shows them to have been 
that year." Then follow notes of discrepancies in pensions, 

(218) 



chap, xvi.] ALLEGED DISCREPANCIES, ETC. 219 

seven millions in one year. In naval, $49,000. In the 
War Department, some $4,000,000 difference; sometimes 
one way and sometimes the other. 

Mr. Bayard says: "May I ask whether the errors he 
points out consist of discrepant repetitions of the same ex- 
penditures?" Mr. Davis said : "Yes, sir." 

Mr. Bayard. — " I understand the Senator to state, that 
by the official accounts of the Treasury, he finds that an 
amount is stated for one year at such a sum, and then 
when the same account for the same year is to be recited, 
it is recited differently, and these are the discrepancies he 
is pointing out." 

Mr. Davis. — "The Senator from Delaware is correct. 
It will be seen by this statement that the debt has in- 
creased over seventeen millions between 1873 and 1874, 
instead of decreased, as claimed. It is true there is a foot- 
note explaining it, but it is my opinion, if the debt is actu- 
ally decreased, the figures and annual statements should 
show it without necessity of explanation of any kind." 

This subject would not be introduced here as matters 
implicating Mr. Sherman at all, had not the compiler of 
this sketch heard, when in Washington, that Senator 
Davis had made a similar statement during Secretary 
Sherman's incumbency of the office of Secretary of the 
Treasury. 

Mr. Bout well makes this explanation of one item which 
may serve as a specimen of the rest: "In the finance re- 
port for 1869, are included outstanding warrants to the 
amount of $4,000,000, which do not appear in the report 
for 1870. There is a trust fund of $14,000,000, the prin- 
cipal of which is never to be paid, only the interest, to sea- 
men. This is sometimes called a debt, and sometimes, in a 
popular way, is not." 



220 HON. JOHN SHERMAN. [chap. 

The explanation of the above would seem to be simply 
the difference in the view taken by different men, of the 
character of assets and liabilities. One man might account 
the annuity payable to seamen as a pension, and so report 
it to the press ; and another, the sum of which it is the in- 
terest, as a debt against the Government. No one has 
alleged that a dollar has gone into the Treasury unac- 
counted for, or that a single dollar has ever been misap- 
propriated. When Senator Davis was asked to name a 
single instance of any official abuse, in respect of the 
finances, he had nothing to allege. The discrepancies 
arose from the different modes of keeping the books, by 
different officers. 

But as the national guild is an exceedingly sensitive or- 
gan of the commonwealth, and this thing is likely to be 
thrown out, as though it concealed some iniquity (a thing 
never vet charged), though it occurred at a time and in a 
department for which Mr. Sherman was in no respect re- 
sponsible, and in the management of which he could have 
had no more control than any other member of Congress, 
it seems no more than just to insert here the explanations 
of the chairman of the Committee on Finance. 

On the 4th day of the following August, the report of 
the Finance Committee was considered. Mr. Davis claims 
that this is not a report made upon investigation by the 
Committee, but a statement prepared by "the Treasury De- 
partment in its defense. He contends that his assertion, 
that there were changes, is sustained by the report as pre- 
sented. To this, Mr. Sherman says: 

''Mr. President, this is the change about which we have 
heard so much, and the only change, not a figure altered, 
not a word omitted, not an erasure or alteration, but a new 
mode of stating the public accounts. This alteration, about 



xvi.3 ALLEGED DISCREPANCIES, ETC. 221 

which so much has been said, is nothing- but a new mode 
of stating the accounts, and that is shown in the fullest 
and completest manner by these documents. Let us go 
further. It is said that there arc discrepancies in these 
accounts. So there are. There have been, and always 
will be. From the nature of things, that is inevitable ; 
but why? There are two series of accounts, we are told, 
here by these public documents, quite different in their 
scope and purpose. The one is kept by the Register, and 
the other by the Treasurer. These accounts are intended 
to be a check upon each other. They are based upon dif- 
ferent elements, but elements which, when analyzed, ena- 
bled an acute person accustomed to accounts to detect any 
wrong or fraud in keeping these accounts. Let me read a 
single paragraph, being a statement of Mr. Bristow, in a 
recent letter, made a part of this report." 

Mr. Eaton.—" I should like to ask the Senator a ques- 
tion, only I do not wish to interrupt him." 

Mr. Sherman.—" I do not object at all, because I am 
speaking off-hand." 

Mr. Eaton. — "The honorable Senator from Ohio is 
speaking of a single statement of account made in one way 
by A, and in another way by B. That is all very well ; 
but will the Senator from Ohio inform the Senate why 
this statement of change w r ent back so many years?" 

Mr. Sherman. — "That is precisely what I am coming 
to." 

Mr. Eaton.— "That is precisely what I want to hear. 
I can not find it explained in the report." 

Mr. Sherman. — "I will now read, first, to show what 
motive induced the change, and I will show the necessary 
difference between these two different accounts. I quote 
from this document, because it is much better and more 



222 HON. JOHN SHERMAN. [chap. 

clearly stated than I could state it in words. I will read, 
especially to my friend from Connecticut, this statement 
of the origin and beginning and ending of this mode of 
changing the accounts, and why it went back. 

" ' Prior to 1871 the outstanding public debt was stated 
from the books of ''issues and redemptions." In 1871 this 
account was restated from 1836, from the "receipts and 
expenditures." From the nature of these two accounts the 
amount outstanding will not agree at any period, although 
when brought within the same dates, and to include the 
same items, there will be no difference. To illustrate: A 
subscription is made to a loan in June, but the bonds are 
not issued until July. On the 30th of June the outstand- 
ing of this loan will be greater by this amount on the 
"receipts and expenditures" account, than on the "issues 
and redemption" account.' 

" Or to make this plainer, I will take the case put by the 
Senator from West Virginia, in his prepared speech of the 
pension account, which I thought any body could answer as 
he went along. When money is drawn in favor of a pen- 
sion agent by draft, it is charged to the pension fund in 
the Treasurer's Office. As a matter of course it goes into 
the hands of the pension agent, and is charged to pension ; 
but that money may not be paid out for six months, and 
the accounts may not be rendered and passed in the Treas- 
ury Department for a year for that identical money. 
While the books of the Kegister might not show this 
money until after the accounts were rendered by the ac- 
counting officer, yet the books of the Treasury would show 
the money paid out by him." 

Mr. Davis. — "The Senator will recollect that I took 
five years; and that the books had been closed five years 



xvi.] ALLEGED DISCREPANCIES, ETC. 223 

Mr. Sherman. — "That is, between the first of one year 
and the first of July of another, there would necessarily be 
a difference in the accounts of these two officers. Between 
any term of years that you can take whatever, there would 
be necessarily a difference. Is not that easily explained? 
It is true, if you go to work and compare the two, and see 
how much money in the Treasurer's book is really in the 
hand of the pension agent, not paid out, you can, by a 
careful analysis, detect whether there is any thing wrong in 
the account That is the only way you can do it; but 
necessarily these two accounts always differ. Let me go a 
little further; 

'"During the year 1870 the public debt accounts from 
1836 were examined with a view of bringing these two 
accounts together. The result of this examination was the 
adoption of the present system of stating the public debt, 
by which these two accounts are made to harmonize, the 
one being a check upon and proving the correctness of the 
other. It was necessary to select some period when these 
two accounts came together, and the year 1836, when we 
had comparatively no debt, was the period selected. When 
this examination was completed, the Register was directed 
to state his accounts accordingly.' That is all there is 
about it. 

"'In regard to the outstanding debt for the years 1869 
and 1870 being published, including accrued interest, less 
cash in the Treasury, the Register submits the following 
statement:' 

■"Now here is what the Register states, which has been 
quoted by the Senator: 

" 'The year of 1869 was the first of Secretary Boutwell's 
administration, who remodeled the debt statement and 
added the item of accrued interest to, and deducted the 



224 HUN. JOHN SHERMAN. [char 

cash in the Treasury from the outstanding principal of the 
debt. The clerk having charge of the division of receipts 
and expenditures in the Register's Office, whose duty it was 
to prepare the tables for the finance report, followed the 
plan of the Secretary's Office in making up the monthly 
debt statement, and reported the outstanding debt for those 
years, including accrued interest, and deducting cash in the 
Treasury. I was led to believe at the time that it was so 
stated, to conform to suggestions made by the chief clerk 
in the Secretary's Office. 

" ' The statement of this account (extending over a period 
of thirty-five years, and involving receipts into the Treas- 
ury of over $6,600,000,000, and an expenditure of over 
$4,200,000,000), from two independent sets of accounts, 
proving the correctness of the one by the other, is in itself 
the highest proof of the accuracy of the public accounts, 
however they may appear in some instances, at first view, 
to contradict each other.' 

"Let me say, that besides the two statements, which it is 
necessary for the Secretary to make, he is by law required 
to make the statement which I hold in my hand, called a 
statement of receipts and expenditures. This statement 
was made from the foundation of the Government, com- 
mencing 1791, and shows, in two tables, the sources of the 
receipts that come into the Treasury, and all the elements 
of payment, what department of the Government it is 
charged to, etc. 1 suppose every Senator is familiar with 
it, It is a statement that has been continued year after 
year. It was made up until 1869. After- that time Mr. 
Boutwell, according to this document, in publishing the 
future statement of the state of the debt, not to correct the 
back statements, not to change the volume that had been 
printed, or was in manuscript, but in stating the public 



xvi.] ALLEGED DISCREPANCIES, ETC. 225 

debt as it existed, undertook to state it upon the plan 
that he thought was the best, and which every body 
knows is the best; that is, a statement showing the in- 
terest added, and the money on hand deducted. That, 
as a matter of course, would vary every year from the 
previous statement. What harm was there in that? On 
the other hand, it made these statements harmonize. It 
was a matter of public notoriety, known to every officer in 
the Treasury Department. Therefore, in making up this 
statement, which he is required by law to make every year, 
he stated the debt, according to his mode of computation, 
in 1836, and from that down, taking the year 1836 be- 
cause we then commenced without any debt in the books 
that were printed after 1871, so and so. There has been 
the bugaboo; there has been the trouble with my friend 
from West Virginia. He does not distinguish between a 
mere mode of stating a debt or an account, or the result of 
certain figures, and a change of the account itself." 
More distinct and clear still are the following words t 
"Mr. President, it is always painful to me to hear state- 
ments made like those just made by the Senator from West 
Virginia, because he does not think about their effect. 
Why, sir, if what he has said is correct, every man who 
has held the office of Secretary of the Treasury, from the 
foundation of the Government, has been a corrupt man. 
He speaks of changing the books of the Treasury Depart- 
ment. Why, sir, that is a penitentiary offense ; and yet it 
is charged against every officer of the Government from the 
foundation down. Certainly the Senator does not mean 
that. What is there about this charge ? The books of the 
Treasury Department have not been changed in a word or 
a figure." 



220 HON. JOHN SHERMAN. [chap. 

Mr. Davis. — "Will the Senator say the same thing 
about the official reports to Congress?" 

Mr. Sherman. — "I do. No official report to Congress 
has ever been changed, and dare not be. It is printed 
every year just as it is sent here. This is what the Sen- 
ator means, and he does not mean any more than this: 
that in 1870, the Secretary of the Treasury, believing that 
the elements which entered into the statement of the public 
debt were not correct—that is, that they did not give the 
information necessary to show at a particular time the 
amount of the public debt for a particular year— undertook 
to revise the previous statements that were printed in the 
reports of the Treasury Department, to show that certain 
new elements ought to have been included at the time the 
statement of the debt was made every year. In 1870-71, 
he gave us a statement of the public debt revised, including 
these new elements; for instance, the accruing interest and 
the trust funds which were accounted a part of the new 
statement, and not in the old one. And there were other 
elements that did not enter into the previous statements. 
He made a statement including these items. I will state 
to my honorable friend, that the report made a few days 
ago, to which we gave a good deal of attention— not so 
much to satisfy my friend from West Virginia, as to satisfy 
every body who wanted to study the matter, and every 
member of the committee was of the same opinion — gives 
the facts and figures, gives the debt as it was originally 
stated, and the reasons why the change was made. It 
states the important elements that were omitted in the 
previous statement, and the reason why those elements 
were brought into the subsequent account. Then the Sec- 
retary of the Treasury, with these new elements made up 
by the officers of the Treasury Department, undertook to 



XVI. 



ALLEGED DISCREPANCIES, ETC, 227 



state that for 1836, although the debt was then reported at 
so much, yet if the trust fund had been added and the ac- 
crued interest had been added, etc., and these other mat- 
ters had been brought in at that time, as he proposed to do 
subsequently, the debt would have been so and so. No 
figures were changed, but only the statements made in 
1870, and from that time on, new elements were consid- 
ered as being proper to have been stated that had been 
omitted without any fault, or crime, or alteration, or for- 
gery." 

THE UNSULLIED PURITY OP OUR NATIONAL GUILD, 

The writer was, not long since, one of the commissioners 
to test the coinage, and of course had access to all parts of 
the mint at Philadelphia. While there he could not avoid 
feeling that he was in an atmosphere of purity. Upon 
inquiry he learned that there were some three hundred 
employes, some of them on low wages, yet in all the years 
since the establishment of the mint, not a dollar has been 
lost. On the contrary, it has netted to the Government 
above its cost and expenses eleven million dollars. 

In the Treasury at Washington there is no less cause for 
admiration than at the mint. Here are some three thou- 
sand employes ; and bank bills, Government bonds, and a 
vast variety of stamps are made from rags into paper, 
printed, stamped, andsentto their destination to the amount 
of many thousand million dollars annually. An indefati- 
gable Senator has been searching, and has found what he 
called great discrepancies in reports made at different times. 
But he has not yet ventured to stand up in his place, and 
assert that a single dollar has been misapplied or not ac- 
counted for. 

To show the sensitiveness of the country in this respect. 



228 HON. JOHN SHERMAN. [chap. XV i. 

the reader is reminded that not many months ago, $47,000 
were stolen in the Treasury building, and in twenty-four 
hours the news of it reached the remotest parts of the 
country, and there was instant search, till the thief was 
detected, and the treasure recovered. 

And now, October 1, 1879, all the money paid for the 
four per cent, bonds to the different agencies has been col- 
lected even more rapidly than it could be used, without the 
loss of a dollar or the least commercial disturbance. 



CHAPTER XVII. 

NEW YORK CUSTOM-HOUSE. 

The whole country can scarcely have forgotten the wide- 
spread dissatisfaction that has been felt and expressed 
for many years past concerning the management of the 
New York custom-house. These evils were no worse under 
the last administration than they had been for a whole gen- 
eration. General Arthur's administration was probably an 
improvement upon what had been the state of things be- 
fore. He was himself a man of fine qualities and of good 
intentions, and though he was an improvement upon the 
past, the evils were so deeply rooted that he could not re- 
move them. A considerable part of the commerce of the 
country was being thrown into the hands of dishonest men, 
because those that were honest would not bribe men to do 
their duty. This was exerting a pernicious influence in a 
great many ways. The example was exceedingly demoral- 
izing to the whole country. What was known to be openly 
and shamelessly practiced at the very center of commerce, 
could not be restrained with a very good grace in the re- 
mote and obscure portions of the country. What was done 
in the great metropolis in the custom-house could not be 
wrong in the land offices, in the Indian department, in the 
post-offices, and in the internal revenue department. Its 
tendency was to spread, like gangrene, through the body 
politic. As a consequence this influence had been preying 

(220) 



230 HON. JOHN SHERMAN. [chap. 

• 

for years upon the vitals of the Republican party, as it had 
been before upon the Democratic. It is passing strange that 
politicians will not learn that the surest way to stand, and 
be upheld by the voice and conscience of the country, is to 
do right, and enforce law. If a law is a bad one, the 
shortest way to secure a repeal is vigorously to enforce it. 
If right, no party can stand long that dare not enforce it. 
There was certainly nothing fair nor right in leaving mat- 
ters so loose in New York that merchants in the city, who 
had money and knew the right wires to pull, could get 
their goods landed and sold before those at a distance could 
get theirs landed. But the combinations and ramifications 
of the custom-house ring, in New York, were so fortified 
on all hands, and so reticulated with the politics of the 
country, as to require unwonted courage to attack it. 

The State of New York being the most populous in the 
Union, would naturally exert a greater political influence 
than any other. The city being the largest on the conti- 
nent, and the commercial metropolis of the whole country, 
would, on that account, be especially powerful. The custom- 
house in that city being the place where the larger part of 
dutiable goods are entered and customs paid, if used for 
the purpose, might be the very key to political power, and 
control the politics of the nation. Such a Goliath as this 
it would require unusul courage to attack. What made it 
worse was that it was in the hands of political friends. 
The Republican party might well have said, and executive 
officers might have said, "Had it been an enemy that had 
done this thing then I could have borne it ; but it was 
mine own familiar friend." It requires more courage to 
attack a friend than it does to assail an enemy. But then, 
in the hands of friends, such a power, if used amiss, is cal- 
culated to do vastly greater harm than would otherwise be 



xvii.] NEW YORK CUSTOM-HOUSE. 231 

possible. If such acts were tolerated in the Republican 
party, how would that party be able to suppress the fraud- 
ulent voting that is so much complained of? Leading 
Democrats would say, and say it plausibly, too, if the Re- 
publicans undertake to retain their power in the State and 
country by a corrupt use of the custom-house, who will 
"throw the first stone" at us if we undertake to recover 
it by a corrupt use of the ballot-box ? In this way, that 
festering sore in the custom-house of New York was set- 
ting an example and stimulating deeds of corruption, and 
more than any thing else likely to bring about its own 
overthrow. Whereas, had the Republican party held 
itself above reproach, by the rigid enforcement of law, and 
of the regulations of commerce, and in defense of the 
rights of citizens, it would have stood fairer before the 
world, and higher in the confidence of the nation. Its 
power would have had a more permanent basis and a 
stronger hold upon the affections of the people. Mr. 
Sherman's policy from beginning to end, has been to en- 
force law and exact obedience to law. But in the New 
York affair it required a tremendous effort. The present 
administration, in assailing that festering sore, required 
more moral courage, and of a higher order, than it did to 
put down the rebellion. It was easy to fight after the at- 
tack on Fort Sumter, but not so easy to assail leading Re- 
publicans in New York City. 

President Hayes and Secretary Sherman were just the 
men to assail that powerful combination. Both of them 
are men who "would rather be right than be President," 
and, therefore, in that emergency of the country — for such 
it really was — the right men were in the right place. The 
changing of officers in the custom-house, may seem like a 
small matter, one that could not call for a great amount of 



232 HON. JOHN SHERMAN. [chap. 

courage. But when we take into account all the circum- 
stances just enumerated, and the fact that it had continued 
so long unsuppressed, and only checked, would indicate 
that to assail this evil would require a man of uncommon 
nerve. But the importance of doing so, and the greatness 
of the victory of the Secretary of the Treasury, and the 
distinguished service he has rendered, will appear from a 
review of Mr. Sherman's statement of the evidence of cor- 
ruption. Resumption of specie payments, the national 
bank system, the funding of the public debt at so low in- 
terest by which so many millions of dollars are saved to the 
industry of the nation, are wonderful achievements; but it 
is exceedingly doubtful whether the attack upon the New 
York custom-house, and its success, is not the greatest and 
best of all. It is said by detractors that the national bank 
grew out of the necessities of war, that resumption and re- 
funding were the results of remarkable coincidences, not re- 
membering how important it was to have a man on hand 
that knew how to take advantage of these coincidences. 
But as to the New York custom-house there were no for- 
tunate coincidences to take advantage of. It was all up-hill 
work. It is doubtful if the President, unflinching as he 
is, could have done it alone, or found another than Secre- 
tary Sherman who would have succeeded in conjunction 
with him. 

But that the reader may be posted upon the merits of 
this conflict let him review the facts of the case. The Presi- 
dent said in his message, January 31, 1879 : ''The custom- 
house should be a business office. It should be conducted 
upon business principles. General James, the post-master 
of New York City, writing on this subject, says: 'The 
post-office is a business institution, and should be run as 
such. It is my deliberate judgment that I, and my sub- 



xvii.] NEW YORK CUSTOM-HOUSE. 233 

ordinates, can do more for the party of our choice, by giv- 
ing the people of this city a good and efficient postal 
service, than by controlling primaries or dictating nomina- 
tions.' The New York custom-house should be placed on 
the same footing with the New York post-office. But 
under the suspended officers" (Arthur and Cornell) " the 
custom-house would be one of the principal political 
agencies in the State of New York." 

The history of this affair, as far as respects the effort to 
change the officers, was about as follows: At the beginning 
of the session of Congress of 1877-8, the President exer- 
cised the appointing power to remove the old incumbents 
and appoint new ones. Not wishing to harm any one or 
cause ill feelings, he did this as a matter of course, not 
ostensibly as a measure of reform, but without giving rea- 
sons. This appointment was rejected by his political friends 
without assigning a reason, but it was well understood that 
the reason was, a determination to hold the custom-house 
as a political engine to influence elections. This was a 
Bull Run defeat of the administration. But the war was 
not over. The Jay Commission was then sent to investi- 
gate the charges that were afloat respecting the abuses in 
the custom-house, and report, preparatory to action in 
earnest and removal for cause. At this time a second sus- 
pension had taken place, and it was yet to be tried before 
the Senate, whether the appointment of a successor should 
be approved. 

The Secretary of the Treasury had communicated to Mr. 
Arthur the causes of removal, which are stated substan- 
tially thus by Mr. Sherman: That gross abuses had con- 
tinued and increased during Mr. Arthur's administration ; 
that persons were paid who rendered little or no service ; 
office expense was increased and revenue diminished; 



234 HON. JOHN SHERMAN. [chap. 

» ♦ 

bribes were receis r ed by subordinates; want of co-operation 

with efforts to correct these abuses. Still, Mr. Arthur made 
serious complaints of the injustice of his removal. Then 
Mr. Sherman offered inducements for him to resign, but he 
declined, lest it might seem to be a confession of guilt. 

After the rejection of the nominations, Mr. Arthur con- 
tinuing in office, every effort was made by the Depart- 
ment to secure his co-operation in needed reforms, but 
without success. 

That the reader may have a full view of the evils to be 
cured in New York, as well as the importance of a remedy, 
some of the evidences are here recited as they were re- 
ported to the Department. 

As to gratuities in the nature of bribes: "The evi- 
dence taken shows that most of the witnesses who were 
interrogated on this point, testified that gratuities were 
constantly received. It was in testimony with regard to 
inspectors, that they were anxious to be sent to discharge 
steamers, rather than sailing vessels, because they were 
paid by the owners of the steamships a gratuity of from 
ten to fifty dollars, technically called 'house money.' The 
agent of one of these lines stated that thirty dollars was 
paid to each inspector, discharging their steamers, as 'house 
money.' The agent of another testified that perquisites 
were constantly paid to inspectors for discharging vessels; 
that the shorter the time the vessel was to be in port, the 
larger the amount paid ; that the inspectors received a 
gratuity for permitting the vessel to discharge before the 
custom-house permit reached the ship; that if these fees 
were not paid, the inspector had it in his power to delay 
the vessel in many ways ; and that it was merely a question 
between the owner and the inspector as to how much it was 
worth to the former to obtain these facilities — that is, 



xvii.] NEW YORK CUSTOM-HOUSE. 235 

whether it was cheaper to pay the inspector a gratuity for 
obtaining these facilities, than to have him stand upon the 
strict letter of the law, and throw obstructions in his way. 
It was also in testimony that other irregular fees were 
constantly received by inspectors, called ' hatchets ' and 
1 bones ' — ' hatchets ' being fees received from merchants 
for the privilege of holding their goods on the dock, in- 
stead of going into the general order store at once ; and 
'bones' being fees paid by passengers for favors extended 
to them at the examination of their baggage. With regard 
to weighers, it was testified that there was a complete list 
of irregular fees adopted by all of them, to be exacted of 
merchants for supplying copies of weights. These fees 
ranged from two cents to thirty cents a ton for weighing 
iron and other metals, and a schedule upon which the 
foreman of the weighers was accustomed to make the de- 
mand, shows in detail the amount to be collected upon each 
barrel, package and bag, upon rice, sugar, and many other 
articles. It was also distinctly testified that the collector's 
entry clerks received fifteen cents for each entry, and the 
naval officer's clerks ten cents for each entry, from brokers 
and merchants, for facilities in passing the entries. The 
receipt of these irregular fees by entry, withdrawal, export 
entry and refund clerks, was afterward fully shown from 
the books of the custom-house brokers. 

" In addition to all this, it is clear from letters addressed 
to the Jay Commission by the collector, naval officer and 
surveyor, in regard to this very question, that the practice 
of taking illegal fees was well known." — Secretary Sher- 
man's Letter to the President, January 31, 1879. 

The following is quoted, as one out of many instances, 
from the same letter : 

" In a case which has come to light since the retirement 



236 HON. JOHN SHERMAN. [chap. 

of Mr. Arthur, it has been shown that goods upon which the 
duties amounted to $120,000, were delivered to the parties 
without the payment of any duties to the Government, and 
in a suit to recover these duties, it is claimed by the im- 
porters, that the unlawful delivery was due to negligence, 
or something worse, on the part of the custom-house offi- 
cers under the charge of Mr. Arthur." 

Now the question comes with pertinency, What was the 
reward that induced the officers to omit collecting duties 
of the same parties, to such an amount ? It could not have 
been permitted without a consideration ; and where there 
was so much bribery, there very likely might have been 
more. It is easier to believe so than that the officers would 
permit such an amount of goods to pass unnoticed. 

Now if such corruption were allowed to pass unrebuked 
and unchecked in the custom-house of New York, it must 
every-where. If permitted in the revenue department, it 
will be practiced in all others. If the executive officers 
are baffled in putting down corruption there, the whole 
country is diseased at its very heart. Then what were the 
value of all that had been so dearly bought in the war for 
the Union, the four thousand millions of treasure, the half 
million lives, the sacrifice of such men as Lincoln, Stanton, 
McPherson, and others, who died to save the nation? 
What were the value of resumption, or refunding, or silver, 
or gold, if all were to become one vast, seething pool of 
corruption? If that were to be tolerated, better let the 
Republic perish at once. The sooner it were to come to 
an end, the less harm it would be able to do. This vic- 
tory of the present administration must, therefore, be 
achieved, or the avails of all the others must become 
worthless. The victory over the New York custom-house 
was the crowning one of a long series, and essential to the 



xvii.] NEW YORK CUSTOM-HOUSE. 237 

value of all the rest; and, as has already been shown, re- 
quired a sterner kind of courage, and a more resolute will, 
than any of the rest. There was no excitement of a battle- 
field, no stimulus of martial glory, nothing but resolute 
wills. Such were those of President Hayes and Secretary 
Sherman. By their resolution the country has been saved 
again. Let the heroes be duly honored. In a pecuniary 
sense, all the people of this country, every man, woman 
and child, have been benefited ; for all the extra cost laid 
out in bribes, was assessed, of course, by the merchants 
upon their goods, and the people had it to pay. Revenues 
stolen from the Government, of course, required increased 
levies therefor in future. So that the fourteen millions 
per annum that is saved in the shape of interest, in conse- 
quence of refunding the debt, is only a part of what has 
been saved to the people by the efforts, the courage, and 
skill of the present Minister of Finance, and the President 
that has sustained him. In all the future honors bestowed 
upon him, let this be put down among the chief. 

One item in the money value of this victory is, the im- 
mensely increased revenues from import duties, as well as 
a great diminution in the expense of collection. 

A fitting close to this as showing the unflinching ad- 
herence of the Secretary to what he deems right and best, 
is the following incident which came accidentally to the 
knowledge of the writer, and shows how persistently Secre- 
tary Sherman has watched over and guarded the Treasury. 

An acquaintance from Mansfield was in his office at 
Washington, when some one came in with a claim of a 
million dollars or more, saying it had been regularly passed 
upon by the proper officers, and it only needed his signa- 
ture to order its payment. Said the Secretary: "It is an 
illegal claim, and I can not pay it." "But it has been 



238 HON. JOHN SHERMAN. [chap. xvii. 

regularly allowed, and must be paid." "I know the law," 
said Mr. Sherman; "I helped make it, and I know what 
it means, and I shall not pay it." " Perhaps the President 
will order it paid." "It may be. Try him, and see." 
The applicant consulted the President, who said, "That 
is the Secretary's business, not mine." After the man 
left, the Secretary said, " The President will not order it 
paid. If he does, I am on my way to Mansfield in less 
than a week, for I never will pay it." 



CHAPTER XVIII. 

THE PORTLAND SPEECH —FINANCIAL CONDITION IN 1873. 

In the fall of 1873 there happened a financial panic, out of 
which most of the economic questions upon which we are now di- 
vided naturally sprung. We must understand the actual con- 
dition of things when this occurred, in order to discuss with in- 
telligence the measures that have been proposed and executed, 
and the questions that still remain open for decision. Our money 
then was paper money, irredeemable in coin, and worth about 
eighty-seven cents on the dollar. The amount outstanding was 
larger than ever before. Sometimes this has been disputed by 
counting as money, at the close of the war, all the compound- 
interest notes and seven-thirty treasury notes. These were no 
more current money than the six per cent, bonds into which they 
were converted. , Both bore interest, and were always above par 
in paper money, and were held as investments, not as currency. 
The amount of paper money outstanding, excluding all interest- 
bearing notes, June 30, 1865, was $747,223,895.76. The amount 
on the 30th of June, 1873, just before the panic, was $749,440,863.94, 
while on the 30th of June, 1874, after the panic, it was $780,948,- 
081.17. 

Again, the rate of interest was higher in 1873 than before or 
since. Before the panic the body of the Government debt bore 
interest at 6 per cent, in gold ; corporations, in fair credit, paid 8 
to 10 percent.; and individuals — especially in the West — mort- 
gaged their farms at from 10 to 12 per cent. The current rate of 
interest may be said to have been 10 per cent. 

The utmost recklessness in contracting debts was then universal, 

(230) 



240 HON. JOHN SHERMAN. [chap. 

not only by individuals, but by cities, counties, towns, and all 
kinds of private corporations. It was an era of wild and reck- 
less waste and improvidence. 

In those speculative times the tonnage of American vessels in 
foreign trade dwindled from 2,379,396 in 1860, to 1,378,533 tons 
in 1873. Wherever we were brought in competition with countries 
doing business upon a specie basis, we were driven from compe- 
tition, either on the ocean or in workshops. 

Kailroads were built where they were not needed, in advance 
of settlements ; furnaces were put up in excess of all possible 
permanent demand, and over-production and over-trading oc- 
curred'in all branches of business. 

The balance of trade with foreign countries had been for a se- 
ries of years steadily against us. From 1863 to 1873 the excess 
of imports over exports was $1,086,410,587, and from 1869 to 1873 
$554,052,607. 

I am not able to give you the amount of private and corporate 
indebtedness contracted in foreign countries during these years of 
reckless speculation, but it was probably equal to or in excess of 
the balance of trade against us. "We then enjoyed the prosperity 
of a profligate while wasting his inheritance, or the happiness of 
a drunkard while on a spree. 

The panic of 1873 called a halt, and, as by a stroke, paralyzed 
all domestic industry, and bankruptcy and ruin spread from cor- 
porations to individuals, and property was unsalable except at 
prices far below its value. 

It is hardly worth while for us to enter into the discussion of 
the causes of this calamity. Honest men would differ about it. 
Some attribute it to the waste of the war, some to the over-pro- 
duction that followed the waste of the war ; some to irredeemable 
paper money. But whatever may have been the cause, the ca- 
lamity was admitted by all to be wide-reaching and long-con- 
tinued. It affected foreign nations much more severely than our 
own. Every nation in Europe suffered as much or more than the 
United States. The industries of Great Britain were paralyzed. 
Our earlier recovery from this stagnation is due to our vast ter- 
ritory and undeveloped resources, and the natural energy of a 
young and vigorous nation. 



xviii.] THE PORTLAND SPEECH. 241 

THE RESUMPTION ACT. 

When Congress met in December, 1873, it undertook to find a 
remedy for these evils, and for a year we had discussions in Con- 
gress, in the press, and among the people, as to how best to relieve 
our distresses, and restore our industries to solid foundation. In 
the course of this discussion the people naturally divided. On the 
one hand, it was insisted that the true remedy was to innate the 
currency by a large increase of paper money, and, with that view, 
$26,000,000 in United States notes were thrown upon the market. 
On the other hand, it was insisted that the only hope for relief was 
to return to a specie basis, and to advance all forms of currency to 
that standard. 

In January, 1875, and during the second session of Congress, 
eighteen months after the panic, the measure known as the Ee- 
sumption Act was adopted by a majority of both branches, and 
approved by the President. 'This was a Eepublican measure; for, 
though many Democrats favored resumption, yet party discipline, 
and the hope of party advantage, induced every one of them to 
vote against the Resumption Act. This measure was a very sim- 
ple one, containing but two propositions — one was that silver coin 
should be gradually issued for the redemption of fractional cur- 
rency, and the other was that on Jannary 1, 1879, the National 
Treasury should redeem, in coin, any United States notes that were 
presented. This act was not to take effect, in its material pro- 
vision, until four years from the date of its passage. Steps were 
taken by Secretary Bristow and your distinguished townsman, Sec- 
retary Morrill, for the gradual replacement of fractional currency 
by silver coin ; but, until the spring of 1877, no material prepara- 
tion was or could well have been made for the redemption of 
United States notes, which continued to be depreciated, being 
worth only 89 to 94 cents in coin. A wide-spread feeling pre- 
vailed that resumption was impossible, that it would not bring 
better times, and the country continued to suffer the tortures of the 
panic of 1873. 

During the whole of 1876 and 1877 the Resumption Act was 
made the subject of denunciation. The absurd notion was put 
forward that it was the cause of the hard times, though no mate- 
rial action had been taken under it, and the hard times cams 



242 HON. JOHN SHERMAN. [chap. 

eighteen months before the Resumption Act passed. All sorts of 
prophecies were made of its failure. We were told that the Re- 
sumption Act was a sham; that it was a hinder an ce to resumption ; 
that the attempt to accumulate coin would put up its price; that 
it would be worth $50,000 to be on the right of the line on the day 
of resumption; that resumption was impossible; that it would 
prostrate industry; that it would stop the sale of bonds; that it 
would raise the rate of interest for the benefit of the bond-holders, 
shylocks, and capitalists. 

The Democratic party, in its platform adopted in St. Louis in 

1876, while pretending to be for resumption, denounced the Re- 
publican party because it had made no preparation for it, but, in- 
stead, had obstructed it by wasting our resources and exhausting 
all surplus income, and because, while annually professing to in- 
tend a speedy return to specie payments, it had anmwlly enacted 
fresh hinderances thereto. It denounced the Resumption Act of 
1875 as such a hinderance, and demanded its repeal. 

Mr. Ewing, of Ohio, and Mr. Voorhees, of Indiana, with others, 
made a minority report, in which they declared that the law for 
the resumption of specie payments on the 1st of January, 1879, 
having been enacted by the Republican party without deliberation 
in Congress or discussion before the people, and, being so inade- 
quate to secure its object, was highly injurious to the business of 
the country, and ought to be forthwith repealed. 

Mr. Tilden, in his letter of acceptance, indorsed this doctrine, 
and, at the same time, declared himself for a speedy return to 
specie payments, saying: "The Government ought not to spec- 
ulate on its own dishonor in order to save interest on its broken 
promises, which it still compels private dealers to accept at a 
fictitious par." 

I will read some of the prophecies made by very distinguished 
gentlemen in regard to the Resumption Act. 

General Ewing, in the House of Representatives, November 22, 

1877, said : 

" If we were wholly out of debt to Europe, if our foreign com- 
merce floated under our own flag, if there were no system of ab- 
senteeism among our wealthy classes, expending their wealth 
abroad, resumption in gold, or even gold and silver, would be 



xvm.] THE PORTLAND SPEECH. 243 

impossible on our present volume of paper currency for many 
years to come. . . . The national banks, the importers, the 
gold rings in New York, the desperadoes of Wall Street, the money 
kings of Europe, to whom we are financially enslaved, they will 
present the greenbacks for redemption and destruction as fast as 
the gold can be paid over the counters of the Treasury." 

Senator Coke, in the United States Senate, May 14, 1878, said: 

" It is better, Mr. President, that we bide our time, and turn 
back from the frightful abyss of ruin which yawns across the path- 
way to resumption. The experiment must end in failure, and 
must engulf the country in a lower deep of misery than it has yet 
fathomed. The bulk of the State, private, and savings banks, with 
their vast sum of the people's deposits, must go by the board by 
reason of the insufficiency of their reserves, and many of the na- 
tional banks must fall from the same cause. In this general crash 
the whole system, from the Treasury down, must succumb. It is 
simply a question of time, for this result must occur, and in my 
judgment the time will be very short after the 1st day of January 
next." 

On the 15th of November, 1877, my old friend, Judge Kelley, 
of Pennsylvania, in the House of Representatives, said : 

. . . "But, gentlemen, the worst has not yet come if this act 
is to be maintained. And I tell you — and you may book it to jeer 
and scoff at me fifteen months hence if it prove not to be a true 
prediction — the suffering we have endured during the three years 
this law has been in existence, is like the chill which embellishes 
while it blasts with feathered frosts the leaves and flowers of the 
tropical plants that surround the homes of our extreme southern 
States, compared with the arctic cold that builds up the mount- 
ainous iceberg, which chills the summer atmosphere of our coast 
as it passes near our shores." 

I have no desire to jeer or scoff at a gentleman whom I sincerely 
respect, although near two years ago he gave us authority to do so, 
if he proved to be a false prophet. 

Mr. Muldrow said, in the House of Representatives, November 
16, 1877 : 

"The act gives the Secretary of the Treasury the power to sell 
bonds, so as to obtain gold to redeem the greenbacks and frac- 



244 HON. JOHN SHERMAN. [chap. 

tional currency; but there is no such provision in regard to the 
national bank issues. The practical working of the law will be 
the absorption and retirement of the greenbacks and the issuance 
in their stead of irredeemable national bank notes. No man with 
any financial sagacity can believe that the national banks will be 
able to redeem their circulating currency with coin in January, 
1879." 

Mr. Buckner, chairman of the Committee of Banking and Cur- 
rency, said on the 16th of November, 1877 : 

" I have not been able to find one man, learned or unlearned, 
capitalist or laborer, merchant or farmer, who believes resumption 
possible or practicable. Perhaps the Secretary of the Treasury is 
an exception." 

I might quote for days the warnings and evil prophecies of our 
Democratic and Greenback friends, but they have been so recently 
made that it is scarcely necessary. On the other hand, the sup- 
porters of this measure insisted that resumption was not only pos- 
sible, but easy; that the accumulation of coin would lower its 
price, improve the public credit, increase the sale of four per cent, 
bonds; and that when the funds should be sufficient to inspire 
confidence in the ability to resume, resumption would be a tranquil 
and easy passage, the sure forerunner of hopeful prosperity. They 
also believed that it would lessen the burden of the public debt, 
and lower the rate of interest not only to the public, but to private 
individuals. . 

SUCCESS OF RESUMPTION. 

Let us now examine which of these opposing opinions has been 
proved to be true by. the test of experience. 

The success of resumption depended entirely upon the ability 
of the United States, by the time fixed, to accumulate in the Treas- 
ury an amount of coin sufficient to meet any demands likely to be 
made upon it. This coin could only be obtained by surplus rev- 
enue, or by the sale of United States bonds, full authority for 
which was given by the resumption act. In April, 1877, it was 
announced by the administration that from the 1st of May the 
Treasury Department would accumulate coin at the rate of 
$5,000,000 a month, and accordingly that sum was set aside from 
the sale of 41 per cent, bonds, up to the 1st of July. 



xviii.] THE PORTLAND SPEECH. 245 

The very announcement of the purpose to resume, with a defin- 
ite plan of resumption, at once had a reviving effect upon the 
public credit, increasing the sale of 4J per cent, bonds. This in- 
duced the Treasury Department, on the 23d day of May, 1877, to 
withdraw the 4^ per cent, bonds, and on the 9th of June, 1877, to 
place the 4 per cents upon the market to be sold at par in coin, 
both for refunding and resumption purposes. This was a critical 
experiment, the expediency of which was gravely doubted by many 
friends of resumption, but it proved a perfect success. This course 
was pursued until November, the price of coin constantly declining 
and confidence steadily improving, when Congress met, and a bill 
speedily passed the House of Representatives to repeal the resump- 
tion act. This and other proposed measures affected seriously the 
public credit, and stopped the sale of bonds as with a clamp. An 
examination of financial problems by the committees of both 
Houses and the debates in Congress caused the Senate to refuse to 
pass the bill for the repeal of the resumption act, and finally pre- 
vented the passage of any bill that would cripple that act, and left 
the Executive authority to pursue its duty as prescribed therein. 

On April 11, 1878, the Department was again able to resume its 
policy of purchasing coin by the sale of 4£ per cent, bonds, and 
shortly afterwards to commence the sale of 4 per cents for refund- 
ing purposes, and this policy was steadily pursued to the end. 
During the process, coin constantly declined and the sale of 4 per 
cent, bonds steadily increased. In 1878 we sold $50,000,000 4i per 
cent, bonds at a premium of H per cent., and $128,685,450 4 per 
cent, bonds at par. Ninety million dollars of the proceeds of bonds 
sold in 1877 and 1878 were held in coin as a part of the resumption 
fund, and the balance was applied to the payment of 6 per cent, 
five-twenty bonds. At the end of the year 1878, and before Con- 
gress had convened, we had thus accumulated, including surplus 
revenue, a coin reserve of $138,000,000. Resumption had practi- 
cally come one month before the day fixed by law, as quietly and 
tranquilly as a vessel would float from the river into the ocean. 
Our notes were no longer at a discount, They were at par with 
coin. The same money was paid to the laborer, the farmer, and 
the bond-holder, and all as good as the best coin issued from the 
mint. On the 1st day of January, and on every day since, both 



240 HON. JOHN SHERMAN. [chap. 

gold unci silver have been ready, and have been paid to every 
holder of a greenback who desired it. So complete was the success 
of resumption that all the notes presented for redemption since the 
1st of January, and prior to the 1st of July, amount to $7,976,698, 
while gold coin has been freely deposited in the Treasury, in ex- 
change for United States notes. The total amount of gold coin 
and bullion in the Treasury on the 2d day of January, 1879, was 
$135,382,639.42. On the 1st day of this month the amount of 
such coin and bullion was §135,436,474.62; and the amount of 
silver dollars has increased from §16,697,338 in January to $28,- 
147,351 July 1st. 

The law provided for the redemption of United States notes only 
at the sub-treasury at New York, and captious critics, who said 
that resumption was a sham, objected that notes were not redeemed 
in other parts of the United States. But, in fact, resumption did 
occur in all parts of the United States; and in the far west, and in 
California, greenbacks rose to and are now at a premium. To re- 
move the complaints of a few persons, that they could not get gold 
coin in Philadelphia and other cities, the Treasury has supplied 
the demand for gold coin wherever it has arisen; but United States 
notes being redeemable in coin, are so much more convenient for 
all the use3 of life that, in practice, they are preferred every- 
where, and are now in full circulation and credit, not only in 
every part of the United States, but in every leading European 
city, and in the islands of the Pacific ocean. 

RESUMPTION NOT AIDED BY CONGRESS. 

JNo assistance whatever was extended by Congress in aid of re- 
sumption. On the contrary, it increased the minimum of United 
States notes, upon which resumption was to be maintained, from 
$300,000,000 to $346,681,016. It recently required the redemption 
of fractional coin as well as United States notes. By pending 
measures of the most dangerous character, and by continual, agi- 
tation, it greatly disturbed the public credit, and made the task of 
the Department much more difficult and its means much less. It 
reduced the revenue from taxes on tobacco to the extent of eight 
or nine millions annually. It largely increased the aggregate of 
appropriations. 



xviii.] THE PORTLAND SPEECH. 247 

The annual appropriations for the fiscal years ending June 30, 
1878, 1879, and 1880, exclusive of appropriations for public debt 
and other permanent appropriations, were as follows : 

1878, $114,069,483 13 

1879, 146,304,309 21 

1880, 161,808,934 00 

While Congress reduced the revenues and increased appropria-t 
tions, it neither levied new taxes nor gave authority to borrow 
money to meet these extraordinary demands, but used the sinking- 
fund which was specifically set aside by law for the reduction of 
the public debt; thus arresting the established policy of the Re- 
publican party of yearly reducing the debt. 

In the last session it appropriated $26,800,000 for arrears of pen- 
sions, debts due a most worthy class of citizens, but provided no 
means for their payment. It applied for this purpose the fund in 
the Treasury provided by law for the redemption of fractional 
currency, leaving this form of debt to be paid out of current rev- 
enue. Fortunately, the increase of revenue caused by resumption 
and reviving industries will, I hope, enable the Treasury to pay 
every dollar appropriated for arrears of pensions by the first of 
January next, without any other increase of the public debt than 
that caused by the temporary application of the fund for the 
redemption of fractional currency. The ability to pay these de- 
mands is largely due to economies effected in collecting the cus- 
toms duties and other executive savings. 

RESULTS OF RESUMPTION. 

Let us now see what have been the legitimate results of resump- 
tion. 

Since the 1st of January, and prior to the 1st of July, 1879, we 
have paid about $1,000,000 coin certificates with United States 
notes, and have paid $119,501,109.93 United States bonds with 
United States notes. Of the enormous sum of called bonds paid 
by the Treasury, so far as is known, not a dollar has been de- 
manded in coin, and thus by resumption we have paid, and are 
paying daily, the five-twenty and ten-forty bonds in currency. 

Prior to definite preparations for resumption, it was impossible 



243 HON. JOHN SHERMAN. [chap. 

to sell four per cent, bonds of the United States at par in coin. 
After such preparations we were able to sell in 1877, $75,000,000 
four per cents., and in 1878, $128,685,450; but the moment that 
resumption was complete, the sale of bonds increased with unex- 
pected rapidity. We sold in the month of January, 1879, $158,- 
904,100, and in the month of February, $90,101,750. In the 
month of March the sales fell to $20,852,100, chiefly by reason of 
a fear that the enormous payments required under the refunding 
act during the months of April and May would create a disturb- 
ance in the money market, but this fear having been dissipated, 
by the 1st of April the sales were rapidly resumed, and in four 
days they amounted to $73,252,300, enough to cover and pay off 
all the outstanding five-twenty bonds of the United States. Thus, 
as the first fruit of resumption, within one hundred days after its 
coming, we sold $343,110,250 four per cent, bonds, with which to 
pay an equal amount of six per cent, bonds, securing a saving of 
$6,802,205 a year. Nor is this all. There were outstanding at 
that time $194,566,300 five per cent, ten-forty bonds, redeemable 
at the pleasure of the United States. To pay off these bonds the 
Treasury Department offered $150,000,000 four per cent, bonds at 
a premium of one-half of one per cent., the residue to be paid 
from the proceeds of ten-dollar refunding certificates or the direct 
exchange of bonds. Pending the preparation of this offer, it was 
greatly doubted whether the Department was justified in demand- 
ing a premium, but as these were the last bonds that could be 
offered within two years I then thought a premium could be 
secured, and would have demanded a higher rate but that the 
law required the refunding certificates to be exchanged at par for 
lawful money. These refunding certificates were designed to fur- 
nish an easy opportunity for persons of limited means to invest 
their savings in small sums, and were of great importance, not 
only for the convenience of all classes of our people, but to in- 
terest them in the advantages and stability of the public debt. 
Within two days the whole $150,000,000 bonds were sold upon 
the terms stated, and offers were made for the whole of the refund- 
ing certificates, which offers were declined, and the certificates 
were sold by postal money-order offices throughout the United 
States, and were eagerly taken in sums of one hundred dollars. 



xviii.] THE PORTLAND SPEECH. 249 

This closed all the refunding operations authorized by law, for 
there are no other bonds that can now be redeemed, except by 
purchase in the open market at their market value. 

The annual saving in the interest-charge, effected by these re- 
funding operations, since the 1st of January last, is $8,810,4(58, 
and since the 1st of March, 1877, to the present time, $14,297,177. 

Sometimes complaint has been made that, during this process 
of refunding, the amount of interest-bearing debt was temporarily 
increased, and that interest was paid on two sets of bonds at the 
same time. This, from the nature of things, was unavoidable 
under the provisions of the refunding act of 1870. By that act 
before any bond can be redeemed, notice must be given for the 
period of three months. Before that notice can be given, bonds 
have to be sold and the money either collected or secured, and 
this process necessarily involves the payment of interest for three 
months, not only upon the bonds sold, but upon those to be re- 
deemed. Advantage was taken of this fact to unjustly arraign 
the Department for a matter beyond its control. A constant out- 
cry was made that the interest-bearing debt was being increased. 
The debt statement would necessarily show that, during the three 
months, two sets of bonds were outstanding, but it would show 
also that the money was in the Treasury, and this being deducted 
would leave the balance of the debt as before. Thus, if you owe 
a thousand dollars, with the right to pay it at your pleasure, and 
borrow money for that purpose, you will have two notes out- 
standing at the same time until you can apply the borrowed 
money to the payment of the first note. 

This is precisely the condition, the United States was in when 
borrowing money to pay outstanding bonds. The debt statement 
of July 1 shows as part of the public debt the whole of the ten- 
forty bonds, and also the whole of the bonds issued for their pay- 
ment, but also shows the money in the Treasury to pay them. In 
the next debt statement the ten-forties will disappear, or such as 
are unpaid will appear among the debt bearing no interest. The 
cash in the Treasury will also decrease accordingly. I thought 
the notice required by the law was entirely too long, and in my 
annual report to Congress, Democratic in both branches, earnestly 
urged a shortening of the period to thirty days or less, in order to 



250 HON. JOHN SHERMAN. [chap. 

save this double interest, but the recommendation was declined or 
ignored. If any one is to be held responsible for the double in- 
terest it should be Congress. In justice to the Department, it is 
but fair to state that all the loans negotiated for the last two 
years have been on more favorable terms than any loans ever 
made by the United States. They were generally made by popu- 
lar subscriptions by the people directly. The saving from the 
amount allowed for the expense of negotiating the loan is over 
$1,100,000, and the premium exacted on 41 and 4 per cent, bonds 
amounts to $1,496,948.25. I can say without fear of contradiction, 
that no nation ever negotiated its loans at a less cost or on as 
favorable terms. The sales of the famous 3 per cent, consols of 
England, when made, were on far less advantageous terms than 
the United States was able to secure after accomplishing re- 
sumption. 

The resumption of specie payments has had the same beneficial 
effect upon the business of private citizens. The reduction of in- 
terest on the public debt has made it possible to reduce the rate on 
all debts, whether State, corporation, or private. Nothing is more 
certain than that irredeemable money necessarily leads to the in- 
crease of the rate of interest. The first effect of its issue is to 
reduce the rate of interest and to advance prices. If not redeem- 
able in coin it depreciates in value, and more of it is necessary to 
conduct business. It causes overtrading and speculation, not only 
as to the prices of commodities, but as to its own value. This is 
soon shown in the advance of the rate of interest, and what is 
called a scarcity of money. This general rule is stated by such 
old writers as Adam Smith and Thomas Tooke, and is fully veri- 
fied by the rate of interest before the panic and since resumption. 
Private debts are now being rapidly reduced from 10 to 8, and 
even to 6 per cent. 

The State of New York has, by law, reduced the rate of interest 
in that State from 7 to 6 per cent. The city of Providence sold 4h 
per cent, bonds at above par. The State of Pennsylvania sold 
$2,000,000 4 per cent, bonds at above par. The city of New York 
sold 5 per cent, bridge bonds at 105.76. Five million dollars of 
Denver and Pio Grande Railway Company 7 per cent, bonds were 
subscribed in two hours — the first time for vears that money has 



xviii.] THE PORTLAND SPEECH. 251 

been pledged for building a railroad. All securities have ad- 
vanced since January 1 at the average rate of 10 per cent. Mort- 
gages at from 8 to 10 per cent, are daily being reduced to from 6 
to 8 per cent. Capital is again seeking investment in any safe 
securities that offer. 

With the first decided preparations for resumption there came 
slowly a revival of business; with the success of resumption, that 
revival is marked in nearly every branch of industry. 

I do not propose to weary you with a mass of statistics, but will 
only state the general results with regard to a few leading branches 
of American industry. 

The increase of our exports of domestic merchandise since the 
period of the panic, is without example in our history. In the year 
ending June 30, 1873, the amount of our exports was $505,033,439. 
In the year ending June 1, 1879, the amount of our exports was 
$699,618,933. In the five years preceding the panic our exports 
were $2,013,702,648; and during the past five years they were 
$2,999,197,652. 

The net imports of merchandise decreased from $624,687,727 
during the year 1873, to $422,895,034 in 1878, or 32 per cent.; 
whereas the value of our exports of merchandise, representing 
mainlv our agricultural and manufacturing products, increased 
from $505,033,439 in 1873, to $680,709,268 in 1878, or 35 per 
cent, 

It may be stated generally that the internal commerce of the 
country shows a gradual increase of traffic since 1873— the im- 
provement during the last year having been more rapid than 
during any preceding year since 1873. The tonnage of the great 
railroads from the East to the West, (he most important highways 
of commerce in this country, shows an increase since 1873 of 37£ 
per cent. The production of wheat and corn, the two leading 
cereal products of the country, which constitute the principal part 
of our exports of breadstuffs, indicates during the last year a large 
increase over the production of 1873. The production of corn in 
1873, was 932,000,000 bushels; in ',878, about 1,360,000,000. Pro- 
duction of wheat in 1873, 281,000,000; in 1878, about 425,000,000. 
The cotton crop of the United States, during the year 1878, was 
larger than any previous crop in the history of the country. Our 



252 HON. JOHN SHERMAN. [chap. 

exports of cotton increased from 1,200,000,000 pounds in 1873, to 
1,608,000,000 pounds in 1878. 

The quantity of wool produced, increased from 158,000,000 
pounds in 1873, to 207,000,000 in 1878. The total amount which 
went into consumption, including domestic production and im- 
ports, representing the manufacture of woolen goods in the United 
States, increased from 236,000,000 pounds in 1873, to 249,000,000 
pounds in 1878. 

Even our shipping interests, engaged in foreign trade— the in- 
dustry most depressed — show some signs of hopefulness. Ships 
and barks are the classes of sailing vessels principally employed 
in foreign trade. The average number of vessels of these two 
classes built during each of the years 1847 to 1858, inclusive, was 
248, but during the year 1871 the number was only 40; in 1872, 
only 15; and in 1873, only 28. Since that time, however, there 
has been a considerable improvement, the average number built 
during each of the last five years being a little more than 82. 

The total tonnage of American vessels engaged in foreign traffic, 
which, as I have already stated, fell from 2,379,396 tons in 1860, to 
1,378,533 tons in 1873, has since that time increased to 1,589,348 
tons in 1878. 

Another indication of increased business is derived from a state- 
ment of the exchanges at the twenty-two clearing-houses in the 
chief cities in the Union, from which it appears that for the first 
five months of the year ending June 30, 1878, the amount of ex- 
changes in those cities was $11,936,373,274, and for the same 
period of 1879, it was $14,350,492,229, showing an increase of 20.2 
per cent, this year. 

I might extend this statistical information to almost every de- 
partment of industry or business, but it is scarcely worth while, be- 
cause the general concurring sentiment of the whole public is that, 
while we have not yet recovered from the languor of the panic of 
1873, yet, under the inspiring influence of specie payments, the 
worst is past, and we are now improving in every branch of indus- 
try. I am not foolish enough to attribute all these signs to the 
act of resumption. No doubt it is largely due to the habits of 
thrift, economy, and industry which necessarily followed the de- 
pression of business, -largely to the migration of people thrown out 



xvnr.] THE PORTLAND SPEECH. 253 

of employment who have found homes in the West, but mainly to 
•the recuperative energies of a vigorous, industrious, and active 
people. What I wish to prove is, that resumption— the restora- 
tion of our currency to the coin standard — contributed to these 
beneficial results, and it belied all the false prophecies made as to 
its effect. 

I have thus stated my view of the successful execution of the 
policy of resumption, and of the beneficial results in the re- 
duction of interest on the public debt and the general improve- 
ment of business. 

OPPONENTS TO RESUMPTION. 

Now, let us examine the specific complaints of our fellow-citizens 
who have been heretofore opposed to resumption and to the entire 
financial policy of the Eepublican party. 

Of what do they complain ? 

First, they said resumption would contract the currency— that 
we would have nothing but coin in circulation. This I have 
shown to be entirely delusive. The Resumption Act provided for 
no contraction of the currency, but United States notes were to be 
retired only as a greater amount of bank notes were issued. The 
only contraction that has occurred since the passage of the Re- 
sumption Act has been by the voluntary withdrawal by national 
banks of a portion of their circulation when they found it could 
not be profitably employed in business. Every act done under the 
Resumption Act tended to increase rather than diminish circula- 
tion ; and now, that all this circulation is at par with gold, the 
coin itself becomes an important factor in the volume of circula- 
tion, and swells the amount that is available for the transaction of 
business. 

The amount of coin and currency in circulation the 1st instant 
was as follows : 

United States notes, .' $346,681,016 

Fractional currency, ....»•• 15,842,605 

Certificates, 17,880,650 

Banknotes, 329,691,697 

Xot^ $710,095,968 

Coin, estimated, $332,443,947 



254 HON'. JOHN SHERMAN. [chap. 

Showing an aggregate of $1,042,539,915, or $21 11 per inhab* 
itant. 

The amount of national bank notes has actually increased since 
1st of January in the sum of $5,^)00,023, so that the result of 
resumption has been to increase instead of diminish the actual cir- 
culation. 

Again, they demanded that the bonds should be paid in green- 
backs. There was a question, upon which honest men fairly dif- 
fered, whether the five-twenty bonds were not properly payable in 
United States notes. They insisted that this should be done, 
though the payment of the bonds in greenbacks would have in- 
creased their issue, in violation of the limit of $400,000,000 pre- 
scribed by the loan laws, and would thus have kept United States 
notes in perpetual dishonor and depreciation; but now they have 
been so paid by resumption, All the five-twenty and ten-forty 
bonds redeemed this year, amounting to $537,G76,550, have been 
paid in greenbacks, and the interest on all the bonds is paid in 
greenbacks, and all this is done without raising any question of 
good faith with the public creditors. 

They also demanded that the customs duties should be paid in 
greenbacks. This is now daily done, without question, as the re- 
sult of resumption. 

"We receive United States notes for all purposes and all de- 
mands, and pay them out for all purposes and on all demands. Re- 
sumption has enabled us to do this. It has accomplished every ob- 
ject which the greenbackers sought to accomplish by the repeal of 
the Resumption Act. Should they not be content? What more 
do they want? Are not we, who have brought about these results, 
better entitled to the name of greenbackers than they who would 
forever keep the greenback as a dishonored and irredeemable 
note? We presided over the birth of the greenbacks, and guarded 
them in the cradle. The Democratic leaders denounced them as 
a fraud, with the mark of Cain on their brow, as worthless, 
to be bought some day by the cord. We have crowned them 
with honor. They are no longer depreciated, but may travel 
the circuit of the world equal to the best coin ever issued from 
the mint. 

The policy of the modern greenbaeker is to depreciate the 



xviii.] THE PORTLAND SPEECH. 255 

greenback, to destroy its purchasing power, to make it depend, 
not upon the intrinsic value of the coin into which it can be 
converted, but upon some imaginary value given to it by law. 
The people of Maine will have to choose between those green- 
backers who strictly preserve the national faith, seek to maintain 
the greenback at par with coin, and those who, with utter disre- 
gard of the public faith, wish to restore the old state of affairs 
when the greenback could only be passed at a discount, and could 
neither be received for customs duties nor be paid upon the pub- 
lic debt. They would revive the old distinction between the 
bond-holder and the note-holder, when a lOOcent gold dollar was 
paid to the bond-holder and an 80-cent irredeemable note was the 
pay of the laborer. We would have one money for all, and that 
good money, each dollar of which will buy 100 cents' worth of 
food and clothing. 

One would suppose, fellow-citizens, that our greenback friends, 
after all their prophecies had been proven to be false alarms, 
after we have secured and enjoyed for a brief period the blessings 
of a sound currency redeemable in coin, would be content to let 
well enough alone; but, dropping the resumption act, they come 
to the front with a new set of dogmas, and invite on them a con- 
test with the Kepublican party. 

Perhaps the fairest way in which I can reply to them is by first 
quoting the platforms of their party in Maine and Ohio, where the 
chief political contests of this year are to be fought. The first 
clause of the Maine platform is as follows : 

" The convention congratulates the people of Maine that the in- 
crease of coin and bonded indebtedness of the Government, in 
time of profound peace, from $1,100,000,000 in 1805, to $2,000,- 
000,000 in 1879, is a fact so startling as to alarm every friend of 
the country ; that the reduction of the rate of coin interest and 
at the same time increasing the principal to such an amount as 
to vastly increase the coin interest continually, under the pretext 
of economy, by the reduction of the rate of interest, is such a 
fraud upon the people as to merit the most severe condemnation." 

This is a curious medley of deceptive statements, the purpose of 
which would seem to be to show that the public debt was increased, 
in a time of profound peace, from SI, 100,000,000 in 1865, to 



256 HON. JOHN SHERMAN. [chap. 

$2,000,000,000 in 1879, while, in truth and in fact, the interest- 
hearing debt, in 1865, was $2,381,530,294.96, and now, that the re- 
funding operations are completed, it is $1,797,643,700. It is true 
that the debt, in 1865, was not all payable in coin; §217,024,160 
was in the form of compound-interest notes bearing 6 per cent, 
compound interest, and $830,000,000 was payable in treasury 
notes bearing currency interest at the rate of 7 T 3 g per cent. ; 
but the latter, having matured, was converted eleven years ago 
into 6 per cent, coin-bonds, a decrease of the rate of interest of 
1j 3 q percent. In fact, the interest-bearing debt has been reduced, 
since 1865, in the sum of $583,886,594.96, and the annual interest 
charge on this debt has been reduced from $150,977,697.87 to $83,- 
773,778.50. 

The statement, as made, would be absolutely false but for the 
equivocation upon the' words "coin interest." 

Now all our interest, though nominally payable in coin, is, in 
fact, paid in currency. Our friends, who never mislead, or hardly 
ever, make their statement technically true, but really false, for the 
interest-bearing debt has been reduced near $600,000,000 and the 
yearly interest $67,000,000. 

Exactly how our greenback friends can say that the reduction 
of the rate of interest, under the pretext of economy, "is such a 
fraud on the people as to merit the most severe condemnation," 
is past finding out. The truth is that the intelligent commercial 
world, except only the greenbackers, has been full of praise and 
wonder at the remarkable success of the Government of the United 
States in the reduction of its debt and interest. No nation in the 
world, in ancient or in modern times, has, in so short a period, 
so greatly reduced the immense burden of debt that weighed upon 
us at the close of the war as we have ; so that now the tax on 
whisky and tobacco will more than pay the entire interest of the 
public debt. 

But they say that this administration has increased the in- 
terest-bearing debt, and they point to the monthly debt statement 
for proof. I have already explained how this was temporarily 
done in the process of refunding the debt. But on the debt state- 
ments hereafter the ten-forty and five-twenty bonds will disappear 
or cease to bear interest; so that our greenback friends will not, 



xvnr.] THE PORTLAND SPEECH. 257 

hereafter, be misled by this operation nor be able to mislead 
others. 

Again, they resolve as follows : 

" That we favor the unlimited coinage of gold and silver, to be 
supplemented by full legal-tender paper money sufficient to trans- 
act the business of the country." 

We have now unlimited coinage of gold, and there is but little, 
if any, objection to an unlimited coinage of silver at its market 
value. 

To quote from Mr. Grochen : 

" It was for the interest of commerce generally, both in India 
and Europe, that the whole of our commercial transactions should 
be based upon an aggregate of silver and gold together, rather 
than that it should rest only upon gold." 

This was the view taken by Hamilton and Jefferson. But to 
secure such a basis the coinage ratio must be the market ratio. 
Free coinage of silver at the ratio of 16 to 1 means the single 
standard of silver. What we object to is the coinage of a silver 
dollar which is worth only eighty-five cents, and which thus will 
demonetize gold and leave us only silver as the basis of our coin- 
age. Silver coin has been made the football of demagogues, until 
now many persons are led to believe that the Republican party is 
opposed to the coinage of silver, while it was the Republican party, 
and the resumption act itself, that provided for the recoinage of 
silver, introduced it into current use in place of the fractional 
currency, and stands ready now to coin it without limit at its mar- 
ket ratio to gold, while the greenback element wishes to coin a 
silver dollar worth only on the average eighty-five cents, and with 
a view to cheapen money, to impair contracts, and to banish gold. 
They refuse to recognize the fact, acknowledged by all the world 
beside, that, by the law of trade, silver has depreciated in com- 
parative value with gold, and that the silver dollar of twenty years 
ago is now intrinsically worth fifteen per cent, less, compared with 
gold, than it was then. We have tried the experiment of coining 
the silver dollar since it was authorized in 1878, and have coined 
$35,801,000. Every effort has been made to put it in circulation 
without forcing it upon unwilling persons, but the Treasury 
Department has only been able to issue SI 3,350.942, of which 



258 HON. JOHN .SHERMAN. [chap. 

86,518,912 have been since returned to the Treasury. The sensible 
course to be pursued with the silver question is to treat it as a 
practical one, and to coin it without limit only when the commer- 
cial nations have agreed upon a market ratio upon which they can 
all stand. It is now believed that this can be brought about by 
commercial treaties, and a negotiation is now pending for that 
purpose. In the meantime, silver coin should be limited in 
amount to a sum that can be maintained at par with gold coin 
irrespective of its value. As to supplementing the coinage by full 
legal-tender paper money sufficient to transact the business of the 
country, this is all well enough, except that the amount should be 
limited to that amount which can be maintained at par in coin; 
otherwise you have paper money fluctuating in value, variable as 
the shade, and a recurrence of all the evils which we have suffered 
since the panic. There is but one way of testing the amount of 
paper money that is sufficient to transact the business of the coun- 
try, and that is by its convertibility into coin on the demand of the 
holder. 

Again, they say that they favor the immediate use of the coin in 
the Treasury for the reduction of the bonded debt. 

This proposition is the purest demagoguism, unless it is desira- 
ble to have irredeemable paper money depending for its value 
only upon the mandate of the Government, or what is called fiat 
money. If we propose to redeem our money, we must have in the 
Treasury coin sufficient to meet any sudden demand. The larger 
the amount and the greater the certainty of redemption when de- 
manded, the less demand there will be. As a matter of course, by 
holding this coin in the Treasury we lose the interest that might 
be saved by its application in the payment of the debt. The 
amount of interest upon the bonds sold for resumption purposes is 
$3,925,000, and this is the only price we pay for the maintenance 
of resumption; but to compensate for this, we have already, since 
resumption, saved in the process of refunding $14,297,177 a year, 
and are now enjoying the benefits of reviving industry and hopeful 
prosperity, largely the result of the maintenance of specie pay- 
ments. Without a large reserve of coin, a combination of brokers 
or bankers wishing to put up the rate of interest, or to speculate 
in the market, could any day endanger resumption or make a 



-win.] THE PORTLAND SPEECH. 259 

panic. It is hard to please our greenback friends. A year ago 
they protested we could not accumulate enough gold to maintain 
resumption, and now, after resumption, they protest that we have 
got too much. 

They say they favor the substitution of greenbacks for national 
bank notes. 

This question of the continuance of the national bank notes is 
one of grave difficulty, which should be taken up by the people of 
the United States, and considered and discussed with the utmost 
care. I am not specially the advocate of any kind of banks; but 
it is certain that the national banks are the best that ever were 
devised — conceded to be so by the leading economists of other 
nations, and proven to be so in our own country by a comparison 
with the State banks. They are generally distributed throughout 
the United States, and form local agencies to promote exchanges. 
Their notes are absolutely secure beyond peradventure. They are 
guarded against counterfeiting so successfully that scarcely any 
loss happens in this way. Compared with the old system of State 
banks, they are in every respect superior, and no sensible man 
would exchange the national system for the State bank system. 

These banks are free, are organized under general law open to 
all alike; so that the business of banking is as free as that of 
blacks mithing. There is no monopoly in it, except that only men 
having money can bank, precisely as only those can farm who 
either own or rent land. These banks are chartered for twenty 
years, and the earliest to expire will be in 1883; so that the ques- 
tion of their discontinuance can not honestly be determined until 
then. The substitution of greenbacks for bank notes, if seriously 
attempted, would make such a stringency in money, and such a 
disturbance in business, that in comparison with it the panic of 
1873 would be but a shower to a hurricane. The withdrawal of 
the circulating notes from the banks would, necessarily, compel 
the sale of the bonds deposited for their security, and this would 
unquestionably lead to the collection of loans and discounts, 
which would affect every village and hamlet in the land. 

It is objected to the national banks that they draw interest on 
the United States bonds deposited by them, and also on the circu- 
lating notes issued by them. As to the bonds held by them, they 



260 HON. JOHN SHERMAN. [chap. 

are the property of the stockholders, and not the property of the 
Government. We require them as security to the holders of the 
notes, because it is the best security. If the bank goes out of ex- 
istence the interest of the bonds will still have to be paid by the 
Government. As to the circulating notes, a part of them must be 
held in reserve and a part loaned to business men; but for this 
privilege, open to all alike, they have paid to the National and 
State governments, taxes averaging $16,908,181 a year for the last 
ten years, a sum greater than five per cent, of the entire amount 
of their circulating notes. If the tax is not sufficient you can in- 
crease it. But, it is said, the Government might issue these circu- 
lating notes and save interest. In doing so, however, it would lose 
at once the taxes collected from the banks ; it would violate the 
public faith, pledged in an express provision of the law creating 
the public debt, that the amount of United States notes shall not 
exceed $400,000,000 ; it would make necessary larger reserves to 
maintain resumption on the increased amount of United States 
notes, and would eventually lead to the abandonment of all idea 
of a specie standard, and again launch the country on the sea of 
irredeemable money, with the inevitable result of wild speculation, 
panic, and bankruptcy. Can it be' that the shrewd, sagacious peo- 
ple of Maine can not see that by yielding an inch to these dogmas 
that threaten the public faith and specie resumption they open the 
sluice-way to repudiation and communism ? Let us in due time, 
as their charters expire, deal with these national banks as may 
seem best for the public interest, preserving always the public 
honor and the specie standard. 

This platform says: 

" The volume of our money should not vary with the chance 
production of the precious metals or the caprice of corporations." 

This dogma is an absurdity on its face. Money is only needed 
to buy productions, and the quantity, value, and demand for pro- 
ductions create a necessity for more or less money in precise pro- 
portion to their amount. A tixed volume of paper money is what 
the greenbackers have hitherto complained of; and one of the 
chief merits of the system of free banking is, that it gives an op- 
portunity for the ebb andflowof currency, the increase or diminu- 
tion of the volume depending, not upon the caprice of corporations, 



xvm. ] THE PORTLAND SPEECH. 261 

but upon the demand and necessity for currency. In this respect 
national-bank notes have greatly the advantage of paper money 
issued by the Government, which can only be paid out according 
to the wants and necessities of the Government in the conduct of 
public business. The true doctrine is, that a volume of paper 
money, alway redeemable in coin and maintained at par by ample 
reserves, increasing and diminishing according to the demands of 
business, should be provided by the National Government under 
general laws, free and open to all alike. Our present system, 
consisting of gold and silver coin equal to each other, and United 
States notes and bank notes, always redeemable, comes nearer 
the ideal form of money than has ever heretofore been devised 
by man. 

GKEENBACK POLICY IN OHIO. 

So much for the Maine platform. Let us turn now to some 
dogmas in the platform of the greenbackers in Ohio. ' They say, 
first: 

"The General Government should issue an ample volume of 
full legal-tender currency to meet the business needs of the coun- 
try, and to promptly pay all of its debts." 

Here is the broad doctrine that the General Government must 
conduct all its operations with fiat money, made a full legal 
tender, and supply enough to meet the business needs of the coun- 
try. How much does this dogma demand ? For the latter pur- 
pose, to pay its debts, it would need about $1,700,000,000, and for 
the former purpose, according to a moderate estimate of a conserv- 
ative greenbacker, it would require anywhere from $700,000,000 
to $2,000,000,000 more. In other words, they propose to strike at 
the foundation of all values by the issue of irredeemable paper 
money, to be used a part in paying the national debt in violation 
of the public faith, and the balance as a legal tender upon all 
contracts and debts between private citizens. It is strange that 
honest men should proclaim such a dogma and not be able to see 
that the only effect would be to destroy the value of this currency, 
and to compel citizens to resort to barter, and, finally, with or 
without law, to coin again. This is the extremity of greenback- 
ism in Ohio. 



262 HON. JOHN SHERMAN. [chap. 

Again, they say, " We are inflexibly opposed to the issue,by the 
Government of interest-bearing bonds of any description for any 
purpose whatever." 

If this dogma had been adopted by "the Government, it would 
have been utterly helpless during the recent war — without credit, 
without the power to borrow money, without the power to conduct 
the operations of war, or to carry on foreign trade. The power to 
borrow money is indispensable to every government of civilized 
man. Barbarians may live without trade or contracts or debts, 
but a country that had no resources exce*pt to issue paper money 
under dogma number one, and denied the power to contract debts 
under dogma number two, would be as weak as a rope of sand, 
and, under these conditions, our Government would relapse into 
anarchy or despotism. 

They also say: ''The national-banking system should be im- 
mediately abolished." 

This only differs from the Maine platform in that it demands 
that the national banks shall be immediately abolished. They will 
not wait a year or a day. Without warning they will compel the 
collection of all the notes held by the banks, and precipitate ruin 
upon every business man or manufacturer in the country. 

They further say : "We demand the immediate calling in and 
payment of all United States bonds in full legal-tender money." 

This is still more monstrous, when it is remembered that no 
debt of the United States is now due or redeemable ; that this ad- 
ministration has redeemed all the bonds that have matured by 
the issue of 4 per cent, bonds, in the way I have already stated. 
The next bonds that are redeemable are those known as the long 
bonds of 1881, issued before the legal-tender act was passed, and 
the 5 per cent, bonds issued under the refunding act, all of which 
are expressly payable in coin. 

It will be seen that this dogma demands that we should violate 
the express stipulation of the contract, not only as to the time 
when the bonds shall be paid, but as to the manner in which they 
shall be paid. There was at one time an honest dispute as to the 
terms and conditions upon which the five-twenty bonds would be 
paid. 



xviii] THE PORTLAND .SPEECH. 263 

PAYMENT OF BONDS IN GREENBACKS. 

I have been arraigned recently in your city for inconsistency, 
because ten-years ago, in a letter to Dr. Mann, I insisted that by 
a fair construction of the loan acts under which the five-twenty 
bonds were issued they were payable in greenbacks. So I did 
contend, and so I say now; but I also insisted that we were bound 
by law and public policy, after the war was over, to advance these 
notes to par in coin, and that we could not take advantage of our 
own wrong in postponing the redemption of United States notes in 
order to pay our bonds in depreciated and dishonored paper 
money ; and this principle was the basis of the act to strengthen 
the public credit, passed March, 1869. Well, we have at last re- 
deemed our pledge to the note-holder, and we have now paid these 
very five-twenty bonds in United States notes with a far greater 
saving than if we had paid them in greenbacks ten years ago, and 
with infinitely greater advantage to the public credit, 

There is now no public debt about which any question exists as 
to the terms and conditions upon which it must be paid, and yet 
it is proposed to violate these conditions by the wholesale, and 
place the United States of America in a far worse position of dis- 
honor and repudiation than Mississippi or Louisiana, or Egypt or 
Turkey. 

Is it possible to go farther in the road of dishonor than is pro- 
posed in these platforms?— and yet the Democrats of the State of 
Maine, members of the old, powerful organization which for half 
a century controlled the destinies of the Government, are asked at 
the end of a great war to support and maintain dogmas which 
strike at the public honor, the public faith, and all the cherished 
principles and aims of that party in its palmy days. You are 
now expected to adopt the crazy dogma of extreme opinions, at 
war with every thing that was said by Jenerson, or Madison, or 
Jackson, or any of your time-honored leaders. I know that it is 
against the judgment, against the instincts, of old-fashioned 
Democrats to train under such a banner, and I appeal to them 
now to come to the rescue of their country— not to be carried by a 
party name or a party badge to the dishonor of their country and 
the shame of their children. 



264 HON. JOHN SHERMAN. [chap. 

I have sometimes thought that the Democrats of the Northern 
States have been led through devious paths enough by the rebels 
of the South in their effort to destroy the Government, and in their 
later movements to sap and mine all the great powers of the 
National Government ; but these extreme greenbackers, as they 
are called, ask you now to follow them in a voyage more danger- 
ous, upon dogmas that can not meet the plain common sense and 
reason of patriotic citizens, such as compose the great body of the 
Democratic party. 

One of the members of Congress from the State of Maine, the 
Hon. G. W. Ladd, is reported to have paid his attention to me, in 
a speech in this city, in the following language : 

" Mr. Sherman has sold one hundred and ninety millions of 
four per cent, bonds, in one day, to bloodsuckers who were chok- 
ing the country, and he should be impeached." 

By this act, in a single day, the Treasury Department saved to 
the people of the United States the sum of $1,900,000. The 
" bloodsuckers " to whom he refers are those who purchased the 
forty millions of ten-dollar refunding certificates, who formed in 
long lines in front of eight hundred post-offices in the United 
States, each demanding the sum of one hundred dollars or less of 
those certificates in exchange for United States notes, and the pur- 
chasers of $150,000,000 United States bonds taken by banks to be 
sold again to citizens and corporations throughout the United 
States and in Europe, bearing the lowest rate of interest at which 
the United States has ever been able to negotiate its securities. 
The proceeds were, within ninety days, applied to the payment 
of bonds upon which for sixteen years the Government of the 
United States had been paying five per cent, in gold. These 
" bloodsuckers " are among the most prominent and enterprising 
and industrious citizens of the United States, anxious and will- 
ing to trust the Government with their earnings, in the full faith 
that the promises made to them upon their bonds and certificates 
will be faithfully redeemed, and yet they are denounced by this 
Congressman with terms of reproach, and I, for doing what the 
law commanded me to do, and which, I proudly say I was able 
to do, through resumption and confidence in the public faith, 
"deserve impeachment." There must be something, fellow-citi- 
zens, in this craze which destroys the reason of men. 



xvin.] THE PORTLAND SPEECH. 265 

The Cincinnati Enquirer threw out what was intended 
to be a slur upon Mr. Sherman, as indicated beiow. Once 
it was intimated, in the same quarter, that he was making 
money out of his connection with the Government. To 
this a complete answer was published, by the same paper, 
vindicating Mr. Sherman. That paper does not hint now, 
that the Secretary is leaving $30,000,000 in the banks for 
his own benefit. It is probably aware of what is a fact, 
that Mr. Sherman does not own a dollar's worth of stock, 
except $2,000 in a Mansfield bank, and $5,000 in a Cleveland 
bank, purchased while they were State Banks of Ohio. It 
is now hinted that this is intended for the benefit of " Jay 
Cooke, McCulloch & Co." The writer is not aware that 
Jay Cooke owns any thing in any bank. It is devoutly to 
be hoped that he does. If the treasury of the United 
States had thirty million dollars that it could not use 
for a few days, and were amply secured by United States 
bonds, against the possibility of loss, it was no more than 
justice to Mr. Cooke to let them lie. Mr. Cooke had sold 
for the State of Pennsylvania bonds to the amount of 
$3,000,000, at par, for three per cent., when they were 
about to offer fifteen per cent., to help the Government. 
He had sold bonds for the Government, $700,000,000 for 
three-eighths of one per cent., when the lowest bid else- 
where was two per cent. The Government owes him at 
least its kind remembrance. 

But these ungrateful attacks upon Secretary Sherman, 
after the mighty work he has done, costing him more than 
twenty years of intense thought and hard labor, not for a 
party, but for his country, should arouse the indignation 
of all who regard their country's honor more than their 
party's pelf. Every man that can take his greenback dol- 
lar and get the value of a full dollar for it, should blush to 

23 



260 HON. -JOHN SHERMAN. [chap. 

accuse Mr. Sherman of any sinister motive in this matter, 
and deserves to be frowned down by every honest man. 
He knows that the guild is for the benefit of the whole 
people, and it would be a violation of its laws, to do that 
wantonly which would derange the business of the country, 
Mr. Sherman explains as follows: 

Gentlemen : I thank you for your kind reception in this busy 
mart of commerce. I know that you are business men, and have 
no time to waste ; nor have I any speech to make to you, except 
upon one matter of business, which affects you in common with 
all the people of the United States. Some criticism has been 
made recently in respect to an order of the Treasury Department, 
and as I received last evening the official documents and will be 
able to make the matter clear, I will consume a few moments of 
your time to state the circumstances and the character of the 
order that you have heard so much about, by which the Treasury 
Department refused to call from the money market of the United 
States about fifty million of United States notes in the busiest 
season of the year. 

You know, my fellow-citizens, that the great refunding opera- 
tions of the United States have been so conducted as not to dis- 
turb the money market, and this has been done mainly by an ex- 
change of 4 per cent, bonds for 6 per cent, and 5 per cent, bonds, 
without drawing from the market any of the legal tender in daily 
circulation. The process proceeded so smoothly and rapidly that 
in less than eight months over five hundred millions of 6 per 
cent, bonds were exchanged for 4 per cent, bonds. In July last 
about seventy millions of called bonds, none of which bore in- 
terest, were presented at the treasury for payment, and there were 
deposited in national bank depositories about fifty-five million 
United States notes or coin available to pay called bonds. 

When I returned from a recent visit to New York I learned 
that, under the order that I myself directed, the money was being 
drawn from the depositories very rapidly, but at the same time 
the bonds were not presented at the treasury. On the 13th day of 
August I found that §6,000.000 of United States notes had been 
drawn from the market in New York in excess of the amount 



xviii.] THE PORTLAND SPEECH. 267 

necessary to meet the called bonds. Then, by the advice of Mr. 
Gilfillan, the Treasurer of the United States, I issued an order 
by which no more money should thereafter be called from the 
market, except enough to meet the called bonds as presented. 
Here is the order. I will read it : 

"Treasury Department, August 13, 1879. 
"Hon. James Gilfillan, Treasurer United States: 

« s IR — With a view to closing, as soon as practicable, the ac- 
counts of the department with depository banks on loan account, 
without unnecessary disturbance of the money market, or the 
withdrawal of legal tenders from current business, you will please 
receive from each depositories in payment called bonds to be cred- 
ited when passed through the Loan Division. You will require 
from each depositories sufficient money in addition to the called 
bonds, and so as to insure the withdrawal of all deposits on loan 
account on or before the 1st of October next. The letter of the 
department of March 26 is modified accordingly. 

" Very respectfully, John Sherman, Secretary." 

Now, my countrymen, that is the order about which complaint 
has been made. I here have a table showing the condition of the 
Treasury of the United States on Saturday evening last. At pres- 
ent, or on Saturday evening last, there were outstanding called 
bonds, uncovered, $-48,952,253.61, in all, upon which interest had 
ceased, and which are payable on demand, and the money was on 
deposit. We had deposited in national bank depositories, secured 
absolutely beyond peradventure, $32,947,613.51. 

So we had drawn from the national depositories over $16,000,000 
legal-tender notes more than were necessary to meet outstanding- 
claims. 

Now, my countrymen, if I had not made the order that I have 
read to you, on the 13th of August, there would have been the 
most infernal howl among business men that could have been 
described. Suppose that I had not issued that order, and that I 
had withdrawn from active circulation $32,000,000 legal-tender 
notes! I glory in that order. [Applause.] It was the best 
thing to do. That money was left in the channels of trade until it 
was needed to meet the called bonds; and, since the day of that 



268 HON. JOHN SHERMAN. [chap, xvm.j 

order, we have paid more than $1,000,000 a day called bonds, with- 
out affecting your money market. We intend to pursue that line 
of policy, and, on the 1st of October, we will close the refunding 
operations of the Government, without in the least disturbing 
your market. 

Now, fellow-citizens, merchants and traders, let me congratu- 
late you upon the auspicious end of the policy of resumption. 
[Applause.] One year ago, when I appeared before you, there was 
some doubt hanging over the policy — there were some clouds in 
the sky. They have now disappeared. Even the most doubtful 
man feels that the policy adhered to has been a wise policy for the 
people of the United States. 



CONCLUSION. 

RESUMPTION ACCOMPLISHED. 

January 1, 1879. This morning dawned upon the 
United States producing a joy, not less universal than that 
of the defeat of Cornwallis or the surrender at Appomattox 
Court-house. The demonstrations were not so loud, there was 
not so much powder burnt, nor were there so many arms and 
legs shattered and lives lost, but it was felt to be a grand 
victory. The hearts of the people were full of rejoicing, and 
the papers abounded with anecdotes about resumption. One 
man had so little faith in its success, that he had offered 
850,000 for the privilege of being the first to receive the 
specie, and when the day came he could not have sold his 
chance for fifty cents. Another, on the first issue of 
United States notes, had taken a five dollar bill, pasted it 
up in his counting-room, surrounded it with a broad black 
line, as if in memoriam of the departed faith of the United 
States, not expecting ever to see it redeemed, but on this 
day his mourning was turned into joy. This was really 
a happy New Year. John Sherman had given to all the 
forty millions of free people of the United States liberty 
to purchase a bright silver or gold dollar. There was a 
quiet settled smile of joy upon every countenance from the 
Lakes to the Gulf, and from the Atlantic to the Pacific. 
The joy of this whole nation was not unlike that of the 
new-born Christian, when he emerges from darkness into 

(269) 



270 HON. JOHN SHERMAN. 

light. Not unlike in its cause and in its manifestation, 
the joy of the new-born Christian which arises from his 
leaving the wrong, and commencing to do right. This is 
just what took place in our national guild on the first day 
of January, 1879. The nation in that respect was con- 
verted on that day, and it was done by the FAITH OF 
THE HON. JOHN SHERMAN. That joy touched a 
chord of sympathy, even across the dashing billows of the 
Atlantic. The great Thunderer on the banks of the 
Thames roared with approbation, and the antiquated court 
of old Spain sent a note of commendation through Secre- 
tary Evarts to the Hon. John Sherman, for his grand 
achievement. All nations rejoiced with us that day. It 
was a grand national victory, but there was no victim, no 
gory battle-field, no groans of the wounded, no mourning 
widows, and orphans, and captives. All was peace on all 
sides. 

Some say it was no great trick of Secretary Sherman to 
bring about specie payments. The balance of trade was 
immensely in our favor. Europe and Asia were buying 
more and more of us, and we less and less of them. Our 
bonds, in fact, were rapidly coming home, not through 
fear, but through the necessity of trade. Money was 
plenty and cheap. Why, it was nothing at all to resume. 
So it was nothing at all to make an egg stand on the little 
end, after Columbus showed how. It was easy to come to 
America, after the faith of the great discoverer found the 
way. Just so it is with resumption. It seems easy enough 
now. It is a wonder we did not all see it before, but we 
did not? John Sherman saw it, and told us so long before 
the panic. He told us so during the panic. He has told 
us so since the panic, and he has labored night and day, 
earlv and late, as no slave in the mines of Golconda ever 



RESUMPTION ACCOMPLISHED. 271 

labored for gems ; he has written and talked for years to 
convince us that faith Only was needed to resume at any 
time. He has struggled and fought with both Democrats 
and Republicans to bring it about. Now it is done, and it 
was John Sherman's faith that did it, or, rather, that per- 
suaded the nation to do it, and for this he is entitled to 
the highest honors this nation can bestow. In truth he 
has them now. There is no higher niche of fame for him 
to reach in this world. 

As an evidence of the appreciation in which he is held 
at his home, the following remarks of Col. Fink at his re- 
ception here in Mansfield, August 21, 1879, are annexed: 

"My Fellow-Citizens: — We air love Mansfield, we 
love old Richland county, and we love dearly this proud 
State of Ohio; but more than all we love this glorious Re- 
publican nation. No one of us all would be willing that 
other lines than the swelling sea that breaks upon either 
shore, should bound our native land. No less than we 
love this country, we love its laws. For them has our 
distinguished townsman struggled in the long years of his 
public life. By these struggles has he been fitted, and by 
wisdom gained to guide, until he stands a height that 
needs no pedestal. 

" We welcome our townsman to-night as a neighbor and 
citizen, yet more than welcome him— America's greatest 
Financier. He is not ours alone, but wherever American 
air is breathed there he is owned. 

" Well may our faces be wreathed in smiles and our hearts 
filled with gladness, as he again comes among us to take 
us by the hand and speak words of cheer for the hopeful 
prosperity of the land we love so well. He comes to us 
fresh from other fields where his voice has been heard, and 
his words have been spoken in the cause of good govern- 



272 HON. JOHN SHERMAN. 

merit. And now, he is to address us to-night and tell of 
the work so nobly going od. But your ears are attuned to 
his voice, and your hearts are anxious for the words of his 
lips; therefore, allow me to present you the Hon. John 
Sherman, Secretary of the Treasury of the United States.'' 

After a well-timed speech by the Secretary, Col. Fink 
again rose and said: 

" My friend says I set him up too high, but you all re- 
member when a compliment had been paid to General 
Washington, and he arose to reply, but the words would 
not come, and the speaker said, 'Sit down, Mr. Washing- 
ton, sit down; your modesty is only equaled by your worth.' 
We know that the spindles are again turning where once 
they were still. We see the blazing furnaces that once were 
dark. We again hear the buzzing work-shops all over this 
broad land, and growing confidence and returning pros- 
perity are bringing happiness again to all our people; and 
wherever the old flag floats on land and on sea — the emblem 
of our nationality — the greenback dollar passes as gold, 
based upon the credit of our nation's banner. To his cool 
brain and strong heart in the face of an opposition from 
which lesser men would have recoiled, we owe it all. He 
is worthy of our highest thoughts, for place your right hand 
upon his great heart, and it will beat America at every 
pulse. 

"Such is our own townsman ; and as a warrant of your 
good will, up with your hats and open your lips, and now 
three cheers for the great financial Secretary.'' 

A large concourse responded with three times three. 



3V77-1 



